This article from Microsoft explains:

“…The Trusted Platform Module (TPM) is a chip that is either integrated into your PC’s motherboard or added separately into the CPU. Its purpose is to help protect encryption keys, user credentials, and other sensitive data behind a hardware barrier so that malware and attackers can’t access or tamper with that data.

PCs of the future need this modern hardware root-of-trust to help protect from both common and sophisticated attacks like ransomware and more sophisticated attacks from nation-states. Requiring the TPM 2.0 elevates the standard for hardware security by requiring that built-in root-of-trust.

TPM 2.0 is a critical building block for providing security with Windows Hello and BitLocker to help customers better protect their identities and data. In addition, for many enterprise customers, TPMs help facilitate Zero Trust security by providing a secure element for attesting to the health of devices….”

Complete article:
https://www.microsoft.com/security/blog/2021/06/25/windows-11-enables-security-by-design-from-the-chip-to-the-cloud/