I've been trying to figure it out for a while and thought I'd get some help.
This is reffering to CPU caches.
(Not refering to their location)
Different processors use different types of cache.
All processors rely on L1 cache, this is usually located on the die of the processor and is very fast memory (and expensive). L2 cache is slower, bigger and cheaper than L1 cache. Older processors used L2 cache on the motherboard, nowadays it tends to be built in to the processor. L3 cache is slower, bigger and cheaper than L2 cache. Again this can be on chip or on the motherboard.
It is possible to have L4 or higher cache, but this is not proving to be worth doing.
If you need an explanation of how cache works, I'll look in to putting an article together.
trace distance from the core