Cause: The decompression of CD audio tracks is hitting a bottleneck. Fix: In ePSXe -> Config -> Sound -> Enable "Enable CDDA" and set "Latency" to Low. Also, ensure your power plan in Windows is set to "High Performance."
CHD (Compressed Hunks of Data) is a lossless compression format originally from MAME. It can:
So CHD is great for archiving — but not for ePSXe.
If your primary goal is to use CHD files to save space and keep your library clean, the emulation community generally recommends moving away from the standalone ePSXe and using RetroArch.
RetroArch uses "cores" (emulators) that are often more up-to-date than standalone ePSXe.
How to play CHD files in RetroArch: