Assembly Caching is the project Deployment technique this allows us to separate dependent assemblies from XAP file and deploy the dependent assemblies as ZIP files.
The advantage of the assembly caching is to reduce application startup time and clients to keep the cached copies of the frequently use assemblies.
You can enable assembly caching just checking the option Reduce XAP size by using application library caching. When you compile Silverlight project this is options is not set by default.
After enabling this option recompile the project your will see ZIP for files each cacheable assembly as shown below.