Cache memory is a type of fast RAM that a computer processor can access more quickly than regular RAM. It stores recently accessed data from main memory to allow for faster future access if the same data is needed again. Cache memory is organized into levels based on proximity and speed of access to the processor, with L1 cache being fastest as it is located directly on the CPU chip, and L2 cache and main memory being progressively slower as they are located further away. Modern processors integrate both L1 and L2 cache onto the CPU package to improve performance by reducing access time.