Firmware is a software program or set of instructions programmed on a hardware device. This provides instructions needed for how the device communicates with other computer hardware. But how cans software be programmed into hardware? Good question. Firmware is usually stored in flash ROMs of hardware devices. While ROM is “read-only memory,” flash ROM can be erased and rewritten because this is actually a type of flash memory. The firmware can be considered “semi-permanent” because it stays the same except if it is updated by the firmware update. You might need to update the firmware of certain devices, such as hard drives and video cards so that they can work with the new operating system. Manufacturers of CD and DVD drive often provide firmware updates that allow drives to read media faster. Sometimes manufacturers release firmware updates that a only make their devices work more efficiently. You can usually find firmware updates by going to the “Support” or “Downloads” area on the manufacturer's website. Keeping your firmware up-to-date is often not necessary, but it's still a good idea. Just make sure after you start the firmware update, you let the update complete, because most devices will not work if their firmware is not recognized.

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Firmware consists of programs installed semi-permanently into memory, using various types of programmable ROM chips, such as PROMS, EPROMs, EEPROMs, and flash chips.

Firmware is non-volatile, and will remain in memory after you turn the system off.

Often, the term firmware is used to refer specifically to boot firmware, which controls a computer from the time that it is turned on until the primary operating system has taken over. Boot firmware's main function is to initialize the hardware and then to boot (load and execute) the primary operating system. On PCs, the boot firmware is usually referred to as the BIOS.
Definition from The Tech Terms Dictionary