Cache memory is important because it provides data to a CPU faster than main memory, which increases the processor's speed. The alternative is to get the data from RAM, or random access memory, which is much slower.
Cache memory is also often called CPU memory and it is usually physically located on the CPU. The data that is stored in cache is usually the data and commands most often used by the CPU. It is a very fast way to serve data to the processor, but the size of memory cache is limited.
Most modern CPUs have three different types of cache memory. The first, called L1 cache, is the quickest and is the first place that a CPU will look when it needs data. However, it is also the smallest of the three types of cache memory. The second type of cache — and the second place that a CPU looks for data — is called L2 cache. It is slightly slower than L1 cache, but is slightly bigger so it holds more information.
The final type of cache memory is call L3 cache. It is the third place that the CPU uses before it goes to the computer's main memory. L3 cache is the biggest cache and, despite being the slowest of the three, is still quicker than main memory.