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Microprocessor architectures traditionally had the same width for instructions and data. Therefore, 32-bit architectures had higher performance manipulating 32-bit data and could address a large address space much more efficiently than 16-bit architectures.
16-bit architectures typically had higher code density than 32-bit architectures, and greater than half the performance.
Thumb implements a 16-bit instruction set on a 32-bit architecture to provide:
higher performance than a 16-bit architecture
higher code density than a 32-bit architecture.