Here is an example of an external...
Here is an example of an external wastegate (arrow). The wastegate takes excess exhaust pressure from the engine and diverts it out the downpipe. This way, a smaller exhaust side housing can be used on the turbocharger for better spooling characteristics.
Internal And External Wastegates, And Turbo Lag
In 1989, when Dodge introduced its diesel-powered Ram D250, it had a non-wastegated WHC-1 turbocharger installed on its Cummins engine. The idea was, since these trucks would mostly be used for hauling, great response was not needed. As trucks started becoming popular daily drivers, the need for better-responding turbochargers became a necessity. There is an amount of time that passes from when you floor your diesel engine to the point where it starts to build a fair amount of boost (say 10-15 psi). This time period is called turbo lag.
To reduce turbo lag, Dodge and other manufacturers started using much smaller exhaust housings and wastegating their turbochargers by diverting exhaust gases around the turbine wheel. The smaller exhaust housing would help the turbo spool up quicker, while the wastegate would allow excess drive pressure to be bled off once the turbo was up to speed. When diesel trucks are modified to produce more fuel or higher rpms, the amount of exhaust gases can exceed the capacity of the internal wastegate. If this is the case, a larger exhaust housing can be fitted, or an external wastegate, mounted in the exhaust manifold, can be added to the turbo system. It should be noted that not all turbochargers are wastegated. In competition applications such as sled pulling, the engine may only be operated in a very narrow operating range (say, 3,500-5,000 rpm). If drivability is not a concern, these racing engines can get away with non-wastegated housings and still have a favorable boost-to-drive pressure ratio.
This is a picture of what's...
This is a picture of what's left of a turbocharger that has had its compressor wheel explode. The turbocharger was destroyed as a result of overspeeding--too much nitrous was used (which significantly increased drive pressure) without proper wastegating.
How Does A Turbocharger Fail? When Do I Need A New One?
The most common problem that leads to turbo failure is when people try to push the stock turbocharger way past its limits, and either the shaft fails, or the compressor explodes. Both of these situations are usually a result of overspeeding the turbocharger due to excess drive pressure. Installing an external wastegate will relieve the drive pressure, but you still may have more fuel than air. In this case, it is time to step up to a larger-inducer-size turbocharger. Most stock turbochargers are good to about 400-500 horsepower. Beyond that, wastegating, and/or installing a 62mm-71mm inducer turbocharger (depending on your application) is a sure bet to make reliable power.
Variable Geometry Turbos, Water-Cooled Housings, And More
As technology marched on, new ways were found to improve the durability and efficiency of the modern turbocharger. Many turbochargers are now water-cooled for greater durability, and the need for an ever-quicker spooling turbo has introduced variable geometry turbochargers to the marketplace. Variable geometry turbos (also called variable vane turbos, or abbreviated as VGTs or VNTs) have small vanes mounted on the frame that will open and direct exhaust gases toward the turbine during low rpm operation, helping the turbocharger spool quicker. The exhaust gas also hits the vanes at nearly a right angle, which effectively leads to a reduced-area housing, which also helps spool up and often eliminates the need for a wastegate. The new 4.5L Duramax is a good example of an engine that uses a variable geometry turbocharger in place of a wastegate. DP