Subject Matter Expert(SME) is the one who has command in a particular area or subject. In the software development industry, SME has a broader definition as one with a higher degree of technical expertise, particularly gained through experience and self-study.
In the technical writing industry, an SME is hired to teach, train, improve, approve, and guide the fellow technical writers. SME understands a product and documentation from a holistic point of view. Manuals and release note is developed by a technical writer in conjunction with SME's. After the completion of a first draft, an SME reviews it with feedbacks to be incorporated. Also, sometimes an SME is interviewed to extract and communicate suitable information to an audience. A technical writer also works with SME to help develop training material. Overall, an SME is required to authentically verify the technical accuracy and sign off a document. Hence, the involvement of SME is crucial during documentation.
Interestingly, there are many SMEs involved in documentation. Sometimes, a technical SME's are a software developer implementing the product and product features or even a quality assurance engineer. The product managers are known to be as the business SME. They know where the product lies. The role of SME depends on the organizational structure. So, SME is the one who understands a subject but technical writer bridges the gap between SME and audience. A technical writer is not an SME. However, a technical writer can be a Document Architect with years of experience.