In a router the route calculation and packet processing take place in the software on layer 3. This means that packets need to be moved from the layer 2 hardware interface to layer three and so it takes some time. In a layer 3 Switch Routing calculations takes place at layer 3 in hardware or software, while the actual packet processing takes place at layer 2. The speed gain is accomplished by reducing the amount of features supported and moving as much logic as possible into hardware.
