From LQWiki

A Compiled-in driver is one that isn't built as a module, but is built to form part of the kernel itself.

At compile time, the make commands require a minimum config file to exist to specify which options need to be built, and whether they are part of the kernel or external.

make menuconfig, make xconfig or make config generally have three options for features, either Y, M or N.

• Y builds the feature into the kernel
• M builds the feature as a module
• N do not build the feature

Compiled-in features can be found in /proc/driver/..