sensor - What processing is done on RAW files in the camera?

Recently I came across a debate about whether it's fair to call RAW 'unprocessed' or 'unaltered' sensor data of a DSLR. As far as I know, the analog sensor data is processed into a digital RAW file using the ISO setting, a process during which the Bayer-sensor data is demosaiced as well. However, those are just the necessary steps for saving a digital file while maintaining maximum quality.

Are those assumptions correct? If so, are there any additional steps that need to be performed between the sensor receiving light and the saving of the RAW file? And can those be reasonably be described as an 'alteration' of the sensor data, or is it fair to say that a RAW file holds the unaltered sensor data?

Answer

It varies highly from camera to camera. Some designs do a minimum of processing on the image sensor itself, others do a little more. Those that do more do so mainly in the area of noise reduction either before or after sending the analog data to be converted to digital data. One method is the relative amplification of the signal from pixels masked for red, green, or blue (which is done for reasons related to the different noise characteristics of pixels filtered for the different colors of the Bayer Mask). Another method used after analog-to-digital conversion is to average pixels with a much higher luminance value than their neighbors to a value much closer to the surrounding pixels.

Even different camera models that share the same sensor design may apply different processing to the output from the sensor, either before or after it is converted to digital information, prior to it being saved as a raw data file. Information about the conditions under which the data was obtained (camera model, sensor characteristics, ISO, WB, etc.) will be appended to the file so the application eventually converting the data to a viewable image will (hopefully) know how to convert it. Demosaicing is not normally done to sensor data before it is saved as a raw file. That is done when the raw data is converted to something else, such as an image displayed on a monitor by a raw conversion application, or converted as output as a jpeg or tiff.