This is the crankshaft position sensor. It is a combined sensor in a S4 and later, in such a way that due to the tooth pattern on the flywheel the sensor picks up a break signal at TDC and a regular square wave at each tooth that passes the sensor. The EZK needs this signal to synchronize the ignition.

This is the timing disk of a manual 928 where you can see the teeth and the gap that produce the timing signal related to the crank position.