Technically speaking, when you use a Clear chip you don't lose memory, you just change the memory settings to the factory default settings, so you lose your prior memory settings if they were different from what the factory default ones are. I guess to a lot of people this is about the same thing but I wanted to clarify. The Clear chip doesn't erase the memory and put a bunch of zeroes in there, it puts good data in there but the data is settings that are usually different from what you want, so you then have to press the white TEST button and get into the menu system and change a lot of settings to what you want them to be. That's why it isn't recommended to do a Clear ram process unless absolutely needed.
The machine's settings are stored in the cmos ram chip, it is a large chip located in a socket near the Game and Reel chips. When the machine is not being powered by your household electrical power the battery on the mpu keeps the cmos ram data intact so it doesn't get corrupted/lost. So if you remove the cmos ram chip from the mpu board it will not have any power to it, will lose its data contents. This is different from an eprom chip or an eeprom chip, you can remove an eprom or eeprom chip from the circuit board and it will retain its data, it does not need power to keep its memory contents intact. A "ram" chip loses its stored data when it does not have power, a "rom" chip does not.
On the motherboard there is a special chip called an "eeprom", it is there for security reasons and it contains information about the machine's configuration. When you use a Clear chip it may rewrite this eeprom chip but I'm not sure about that. The eeprom chip is soldered to the motherboard at the factory, but sometimes someone has added a socket while replacing the eeprom. It is called an "eeprom" instead of an eprom because it is "electrically erasable", whereas an "eprom" is erasable by exposing it to UV light for 20-30 minutes.
In the photo below the cmos ram chip is circled in yellow. On the board it is marked "CMOS". This photo is a 10mhz mpu board, the 16mhz board is a little different but similar. You can easily tell if an mpu board is the 10mhz version because it has the round blue volume control along one edge. The name "cmos" comes from the internal construction of the chip, the cmos material allows the chip to use very little power, so the battery lasts longer.