torque reduction

On the 1-2 upshift, the engine note changes to a very ugly sound and there is a momentary slight loss in power.  This is a torque reduction algorithm built into the ECU.  In general, the torque reduction algorithm apparently does two things:  (1) it shuts off fuel to four of the eight cylinders for .4 seconds, and (2) although this is subject to some debate, as noted below, it may, on 01's (02's also?), open up the boost bypass.

The three posts below (edited only for spelling and format) explain torque reduction well, but must be read start to finish to get the whole story:

What, exactly, does a boost bypass do?

Boost is activated by the lack of vacuum when the throttle is opened. The bypass is an electrical solenoid valve in the vacuum line, giving the PCM computer the ability to shut off the boost.

Why, exactly does it do it?
 

The main reason for the boost bypass is to protect the transmission. Full boost and eight cylinders are hard on the tranny during the 1 - 2 shift. When stock, the engine cuts to four cylinders and the boost bypass activates for the 1 - 2 shift at WOT. The duration of both the bypass and four cylinder mode is about 1/2 second. The engine recovers nicely from the four cylinder mode, but the S/C takes longer to recover from the loss of boost.

What, exactly, will happen to a motor if you are not "careful" after installing a boost bypass?

Again, it's the tranny that comes up a little short, not the engine (the engine is protected by the rev limiter - stock anyways). Defeating the boost bypass and/or the four cylinder mode may shorten the life of the tranny.

What, exactly, does knowing how to drive have to do with a boost bypass keeping your motor safe?

Again, transmission. How long the tranny will last with the boost bypass and the four cyl mode defeated depends on several variables. How often do you WOT the 1 - 2 shift, and how much have you increased the overall boost are the two most important questions. Also, never back off from WOT at the shift. The tranny "slam shifts" into 2nd, and doesn't like it.

Recommendations for best tranny life without sacrificing performance:
1. Defeat the boost bypass by bypassing the solenoid valve with vacuum line.
2. If you run a chip - a) have the duration of the four cylinder mode shortened to around 0.2 sec, but do not defeat entirely; b) do not raise the shift RPM by much, if any; c) do not raise the rev limit by much, if any.
3. Install valve body in tranny (for less slippage and heat buildup during shifts).

Notes:
* If you put better rods in the engine, you can raise the rev limit and shift RPM.
* If you have the tranny built (better clutch packs), you can think about defeating the four cylinder mode entirely.

The "recommendations" are good for "daily driver."  For a "daily driver," the "notes" are probably going a bit overboard.

Do some searches for "Transmission" / "Tranny" here and on NLOC and you will get an idea of what it takes to tear one up.

PT

There is a wastegate on these trucks that will vent excess boost while under no-load (vacuum).  When you give it gas, and put the motor under load, the vacuum will decrease or go away (WOT).  The lack of vacuum will allow boost.

Now, when the PCM sees something it doesn't like (Rev Limiter Hit, Excessive Trans Heat, etc. . .), it will trigger a electric solenoid to open the vacuum line and allow vacuum to the waste gate, dumping your boost.

You can go with the $25 kit from JDM, or go with the free route and live with a soft code sitting in the PCM.  Either way, it will have the exact same effect.

Ford (SVO/SVT) did put the 4 cylinder knock out and boost vent on the 1-2 for a reason; to prolong the life of the transmission. But it has been out experience (now on the 4th transmission), that those concerns are not warranted on a fairly stock truck (chip, filter, and small pulley).  But when you do run large amounts of boost and/or nitrous, blowing clutch packs will be a problem.

My advice for a fun daily driver that can still rip up the strip pretty hard with out risking damage would be: a chip (tuner of choice), filter (tuner of choice), pulley (2 lb. from tuner of choice), and a shift kit (method of choice).

Ok, there is some good info and some not so good info in this post. I will try to address all the questions here in one post, sorry if I am repeating what someone has already said on certain parts.

What, exactly, does a boost bypass do?

The boost bypass is a vacuum activated valve that has a butterfly plate inside the blower case. When vacuum is applied, the bypass opens and allows air to bypass the blower rotors.

Why, exactly does it do it?

There are several reasons. One as previously described, is to vent boost off on sudden decel. This is more damaging on a centrifugal blower like a Vortech, but on a roots blower, it's not too healthy either and can cause premature rotor gear wear. Another reason is to reduce heat. With no bypass, the blower would be constantly heating the intake charge. Anyone here who's ever owned a Gen 1 Lightning or Mustang with a 1500 Kenne Bell blower (no bypass) will tell you that you can cook your breakfast on it. And some have even had their IAT sensors max out (256 degrees) using those blowers with no bypass. With the bypass open, you don't superheat your intake charge when you see vacuum, which is 90% of the time you are driving.

What, exactly, will happen to a motor if you are not "careful" after installing a boost bypass?
What, exactly, does knowing how to drive have to do with a boost bypass keeping your motor safe?

I don't think these two questions are valid questions, because it appears there is some serious confusion going on here . . .

There seem to be three different things being discussed in this thread, that some people think are all the same thing.

Boost Bypass - this is what I described above. It's the vacuum activated valve that allows air to bypass the blower rotors. [Editor's note: this is somewhat inaccurate--the bypass allows the air from the rotors to circle back to the other side of the rotors rather than building up positive manifold pressure]

Boost Dump Solenoid - this is an electrical solenoid that can vent boost off if the PCM commands it.

The $25 bypass kit - this "bypasses" the dump solenoid, giving normal control to the boost bypass, and not allowing the PCM to shut it off.

As for WHY we have a device that would kill boost on the truck, here goes . . . The PCM monitors everything that is going on with the drivetrain. There are several "failsafes" (7, I believe) that if the PCM sees, it will kill boost to the motor, in order to decrease power output. The main reason people started disconnecting the boost solenoid, is a failsafe called Brake Torque. This failsafe occurs when the PCM sees the brake pedal applied, and the throttle at WOT, also known as a burnout. When you are at the track, and you do a burnout, then make your pass, and the truck hits second gear and kills boost, then you run a 16 second ET, that's because of the Brake Torque failsafe . There are several other ones, such as excessive misfire, high ECT temp, malfunctioning sensor default, high trans temp, rev limit, and a few others. Contrary to what some believe, there is NO overboost failsafe. The PCM does not sense boost, and there is no sensor on the truck that reads boost. The boost solenoid is not there to kill power to the trans on shifts, that is done through the PCM via Torque Reduction (kills injectors). However we've noticed on the 01s that there does seem to be a boost dump occurring on the 1-2 shift if you don't disconnect it.

As for damage that could occur from disabling the solenoid . . . Well, I've stated most of the important failsafes above. If you are going to disable yours, whether it's with a vacuum bypass kit or just unplugging the solenoid, you should just be aware that if those issues arise, the PCM won't be able to kill boost. But also keep in mind that the PCM does take other action during failsafes other than killing boost.

Hope this helps.

Almost every chipped truck I build a tranny for has moderate to severe damage in the intermediate clutch.  I've had a few people who have come up and had me build their tranny while they waited (it is kinda cool to see) and to a man they've all been horrified at what second gear plates looked like and they never even noticed, it happens gradually, but it does happen.

In a later post, Gregg elaborates:

[T]orque reduction . . . was very specifically put into the strategy to protect the intermediate clutch, and if you disable it, your intermediate clutch will die after a given amount of times it slams into second gear at WOT without it. The plates just won't take the torque, I've seen many many times how it damages them. I'm willing to bet a Chocolate Milkshake that if you take 5 chipped trucks with Torque Reduction disabled and 5 unchipped trucks, drive them 10K miles each and bring me the intermediate clutch plates from them, I can tell you which ones came out of which trucks.

Except for the 01's (and maybe 02's), there is no boost dump on the 1-2 upshift.  The torque reduction fuel shutoff can be reduced in time to produce more satisfying shifts and better track times without undue stress on the transmission.  Defeating the boost dump solenoid should probably be left for serious drag racers.