What is meant by the term SMPS, and how does that contribute to the functionality of the hardware?

Sometimes interviewers will use acronyms when asking a question. They assume that anyone within this profession is familiar with the acronyms they are using. If you are, you should proceed to answer the question. You may want first to define the acronym to ensure that you and the interviewer talk about the same thing. If you're not familiar with the acronym, ask the interviewer to define it. Conversely, it would be best never to use an acronym when responding to a question without first defining it and confirming that the interviewer is familiar with it.