A modulo counter is a counter that wraps around when it reaches a certain value. For example, a counter modulo 5 will count 0, 1, 2, 3, 4, 0, 1, …; namely, after 4 it will wrap around to 0. The reason the counter wraps after 4 is that to count five clock pulses starting from zero, the maximum value of the counter must be (modulo-1), in this case, 5-1=4.

Every VHDL counter is a modulo counter. If you define a two-bit counter, it will wrap around automatically from 3 to 0 without the need of writing special logic for that.

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