Compiler design is the process of creating a computer program called a compiler, which translates source code written in a high-level programming language into a lower-level language or machine code that can be executed by a computer. The compiler analyzes the syntax and semantics of the source code and generates the corresponding machine code in order to make the program run efficiently on the target platform. Compiler design involves various stages such as lexical analysis, syntax analysis, semantic analysis, optimization, and code generation. It plays a crucial role in the development and performance of software applications.