The compression coil was a major component of a Trace Compression Hyperdrive.
It was used as a hyperspacial field waveguide, and with the help of a small auxiliary field guide, would shape the hyperspacial field, generated by the rotary hyperdrive motivator, around the ship. It also compressed the field, enabling a faster hyperdrive speed that the hyperdrive motivator was designed for. This enabled freighters equipped with such a device, to travel at a hyperspace factor of 2.0, where the older model hyperdrive motivator would have only given a factor of 3 to 4.
While the coil itself was usually just a specifically angled durasteel coil, the precision alignment needed for the system to work required that it constructed into an alignment block. This resulted in the coil appearing to be a box shape, approximately half a meter long. The block would often contain other related components as well, and would have many different wires and connections to it.
The compression coil was much more prone to breakages than a standard hyperspacial field guide, as the hyperspacial forces exerted on it due to the compression were much greater. However, it took the strain away from the hyperdrive motivator, which was usually a much more expensive component.
If the coil broke, however, it could cause major fires, and even stop the rotation of the whole engine, cutting off the ship's power. This could be disastrous if an external generator was not available.