Techopedia Explains Fusion Drive
Apple's Fusion Drive technology is primarily designed to provide faster system access to commonly used data, applications and services. This is achieved through the installation and integration of two different storage drives - a typical rotating HDD and a flash storage device based on SSD technology. Once the iMac or Mac mini system is used, the Mac OS learns and identifies frequently used items and moves them permanently to the flash storage device, whereas in-frequent programs reside in the standard HDD. The whole ongoing process of moving data in and out of the flash drive is invisible to the user, who sees the standard HDD and flash SSD as a single drive.
Fusion Drive is different from disk/data caching techniques, as the former permanently moves data to a faster drive, but the latter replicates or temporarily moves data to a disk cache.