I have heard a lot of the time that "the core is not large enough to handle the current, and will reach saturation". What is saturation and why is it a bad thing to reach saturation?
Rawbrawb's answer doesn't explain the actual mechanism by which saturation occurs, which is a fairly easy to understand:
It helps to first understand how materials generate magnetic fields. A simple way to think of this is as each atom being a small loop of current which generates a magnetic field.
A magnetic material has huge numbers of these loops. These loops tend to align themselves into "magnetic domains", which are microscopic areas where all of the loops are in alignment. In an unmagnetized material, the directions of the domains are randomly distributed, and so there is no net magnetic field.
Applying a magnetic field to a ferromagnetic material will start to align the magnetic domains, resulting in an "induced" magnetic field from the material. Increasing the applied magnetic field will increase the amount that the magnetic domains are aligned, and so increase the induced magnetic field. This is typically very non-linear. At some point, the applied magnetic field aligns ALL of the domains, and it is no longer possible to increase the magnetic field from the material. This state is known as "saturation".
To understand this you have to first understand the role of permeability in magnetic fields. When you have a material in a magnetic field that has higher permeability it intensifies the field. So a device that has a high permeability material will have higher inductance than the same device but without the material. This is a good property because it allows you to have higher valued components in less volume.
There is often a limit to the magnetic field intensity that such materials can support. The mechanisms for how they lose (or decrease) their permeability differ according to the material. But there is some limit above which the permeability drops. It is at this point (Hm,Bm) that the material is said to be saturated, which is a good analogy to how water saturates a rag. Except in this case, the rag often then loose the ability to hold some of the water it already has absorbed, so not an exact analogy.
There are two primary dangers of this:
- The value of inductance or linking inductance does not follow a nice relationship so the parameters under which the circuit is designed may shift (if this saturation is unintentional). But some circuit designs rely on his effect to accomplish their roles.
- In some materials, the permeability drops a lot. What that means is that the existing magnetic field lines now have to find some place to be and as a result they "pop" out of the core material rapidly supporting the volume around the device. These rapidly expanding field lines can interfere with other magnetic devices and also are a source of Electro Magnetic Interference (EMI).
Air inductors have far lower values of inductance but also do not exhibit this saturation effect.