Magnetoresistance is the phenomenon in which the electrical resistance of a material changes when an external magnetic field is applied. This change occurs because the magnetic field influences the motion and scattering of conduction electrons.
The term Giant Magnetoresistance (GMR) is used because the change in resistance is exceptionally large compared to ordinary magnetoresistance. In multilayer structures made of alternating ferromagnetic and non-magnetic conductive layers, the electron scattering strongly depends on the relative alignment of magnetic moments.
GMR devices work based on the Giant Magneto Resistance (GMR) effect. This effect is used in hard disk drives to read data. A low resistance state represents a digital 0 and a high resistance state represents a digital 1.
A GMR device is built using multiple thin layers of ferromagnetic and non-magnetic films. It contains:
The device resistance changes significantly depending on whether the magnetic layers are parallel (low resistance) or anti-parallel (high resistance).

Figure 1: GMR Device working peinciple