The JVM allocates small objects by incrementing a pointer in the “young generation” region. The GC later moves all objects that are still alive from that region to a different region. The “young” region can then be reused from scratch. The moving of objects effectively defragments (compacts) that region of the heap. Modern GCs use multiple per-thread and/or per-core regions, i.e. there are generally multiple “young” regions, not just a single one. Memory is allocated from the OS in large chunks.

There is intermediate fragmentation due to dead-but-not-yet-collected objects. Together with the use of different generational regions, GC languages thus require more memory (a rule of thumb is twice the memory of a non-GC program), but memory is cheap, and not having to reference-count and deallocate each object individually can conversely have performance benefits.