The Yocto Project builds everything from source. When you create a new project, only the configuration files are created. The build process then compiles everything from scratch, including the cross-compilation toolchain and some native tools important for the build.

This process can take a long time, and the Yocto Project implements a shared state cache mechanism that is used for incremental builds with the aim to build only the strictly necessary components for a given change.

For this to work, the build system calculates a checksum of the given input data to a task. If the input data changes, the task needs to be rebuilt. In simplistic terms, the build process generates a run script for each task that can be checksummed and compared. It also keeps track of a task's output, so that it can be reused.

A package recipe can modify the shared state caching to a task, for example, to always force a rebuild by marking it as nostamp. A more in-depth explanation of the shared state cache mechanism can be found in the Yocto Project Reference Manual at http://www.yoctoproject.org/docs/2.4/ref-manual/ref-manual.html.