They are pre-compiled (once), so faster for repeated execution of dynamic SQL (where parameters change)
Database statement caching boosts DB execution performance
Databases store caches of execution plans for previously executed statements. This allows the database engine to reuse the plans for statements that have been executed previously. Because PreparedStatement uses parameters, each time it is executed it appears as the same SQL, the database can reuse the previous access plan, reducing processing. Statements "inline" the parameters into the SQL string and so do not appear as the same SQL to the DB, preventing cache usage.
Binary communications protocol means less bandwidth and faster comms calls to DB server
Prepared statements are normally executed through a non-SQL binary protocol. This means that there is less data in the packets, so communications to the server is faster. As a rule of thumb network operations are an order of magnitude slower than disk operations which are an order of magnitude slower than in-memory CPU operations. Hence, any reduction in amount of data sent over the network will have a good effect on overall performance.
They protect against SQL injection, by escaping text for all the parameter values provided.
They provide stronger separation between the query code and the parameter values (compared to concatenated SQL strings), boosting readability and helping code maintainers quickly understand inputs and outputs of the query.
In java, can call getMetadata() and getParameterMetadata() to reflect on the result set fields and the parameter fields, respectively
In java, intelligently accepts java objects as parameter types via setObject, setBoolean, setByte, setDate, setDouble, setDouble, setFloat, setInt, setLong, setShort, setTime, setTimestamp - it converts into JDBC type format that is comprehendible to DB (not just toString() format).
In java, accepts SQL ARRAYs, as parameter type via setArray method
In java, accepts CLOBs, BLOBs, OutputStreams and Readers as parameter "feeds" via setClob/setNClob, setBlob, setBinaryStream, setCharacterStream/setAsciiStream/setNCharacterStream methods, respectively
In java, allows DB-specific values to be set for SQL DATALINK, SQL ROWID, SQL XML, and NULL via setURL, setRowId, setSQLXML ans setNull methods
In java, inherits all methods from Statement. It inherits the addBatch method, and additionally allows a set of parameter values to be added to match the set of batched SQL commands via addBatch method.
In java, a special type of PreparedStatement (the subclass CallableStatement) allows stored procedures to be executed - supporting high performance, encapsulation, procedural programming and SQL, DB administration/maintenance/tweaking of logic, and use of proprietary DB logic & features