Final answer:
The Application-Specific Integrated Circuit (ASIC) in a network switch is the component that reduces packet handling time by processing packets efficiently due to its specialized design.
Step-by-step explanation:
The component in a switch that reduces the amount of packet handling time inside the switch is the Application-Specific Integrated Circuit (ASIC). ASICs are specialized hardware chips designed to perform specific tasks much faster than general-purpose CPUs. Due to their dedicated functionality, ASICs can process packets at a much higher efficiency, significantly reducing the time needed to handle each packet. They are especially useful for reducing latency and increasing the throughput of network switches.
On the other hand, the central processing unit (CPU) in a switch handles the general tasks and the management of the switch but is not specialized for fast packet processing. The memory buffer temporarily stores packets during processing but does not directly reduce packet handling time. Lastly, the power supply provides the necessary electrical power but has no role in the processing of packets.