In case of CEF, if it is using cache memory to store the FIB table entries or it uses specialised hardware to store it. And for processing this if it uses router/switche's processor memory or it has specialised hardware to do this.
Raju explained very well about the CEF function and I would like to add few things with Raju.
Although CEF is a Cisco proprietary protocol other vendors of multi-layer switches or high-capacity routers offer a similar functionality where layer-3 switching or routing is done in hardware (in an ASIC) instead of by software and the (central) CPU).
Example like The Catalyst 6500/6000 with Supervisor Engine 720 uses a hardware-based CEF forwarding mechanism that is implemented on the SP.
CEF is mainly used to increase packet switching speed by reducing the overhead and delays introduced by other routing techniques. CEF consists of two key components: The Forwarding Information Base (FIB) and adjacencies.
In order to take full advantage of CEF, it is recommended to use distributed CEF (dCEF), where there is a FIB table on each of the line cards. This avoids the need for querying the main processor or routing table in order to get the next-hop information. Instead, fast switching will be performed on the line card itself
dCEF uses an Inter Process Communication (IPC) mechanism to ensure synchronization of FIBs and adjacency tables on the route processor and line cards.
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