The memory hierarchy is a mechanism of comparing the cost and performance as well as provides a guide for the designer and places we can store data and instructions for compiling etc.
Originally, intel computers had one cache only on the motherboard. Later on, a second cache known as L1 cache was added directly on the processor to improve general performance of the computer in terms of speed and processing power. The cache on the motherboard was known as the L2 cache. And it was slower than the processor speed.
The problem originally forcing the L2 cache to run at less than the processor core speed was simple: The cache chips available on the market simply couldn't keep up. Intel built its own high-speed cache memory chips for the Xeon processors, but it also made them very expensive. Pentium I and Pentium ii computers adopted this method.
A breakthrough occurred in the second-generation Celeron, where Intel built both the L1 and L2 caches directly on the processor die, where they both ran at the full-core speed of the chip. This type of design was then quickly adopted by the second generation Pentium III, as well as the AMD K6-3, Athlon, and Duron processors. In fact virtually all future processors from Intel and AMD have adopted or will adopt on-die L2 cache as it is the only cost-effective way to include the L2 and bring the speed up.