Explain the concept of 'bundling' in Webpack and how it impacts web performance.
Bundling is the process of combining multiple files (usually JavaScript and assets) into a single file or a few files.
While bundling can improve performance by reducing the number of HTTP requests, it can also lead to larger initial downloads.
It ensures that the code is pre-packaged and ready to execute when deployed, avoiding the need for runtime dependency resolution. Proper code splitting and lazy loading can mitigate this issue.