Before writing about the cache memory, you must get well-versed with the terms RAM, and the processor. RAM stands for Random Access Memory. It is a high speed memory which holds the data being currently processed. The processor is actually an Integrated Circuit Semiconductor, which actually performs the calculations.
Now, the cache memory can be defined as a piece of very fast memory(static memory), which is placed between the processor and the RAM. The cache memory helps in optimum utilization of the processor speed by providing it data at a higher speed than the RAM.
When data needed by the processor is found in the cache memory, it is called a CACHE HIT, else it is called a CACHE MISS.
The cache memory, thus helps in increasing the performance of the computer.