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They are both engineered wood products, constructed using similar methods. The main difference is price. OSB (oriented-strand board) is generally cheaper and has a more uniform composition and appearance.
Even though they are both made of layers of smaller pieces of wood glued together, the small pieces that make up a sheet of plywood are still quite visible in the finished product, unllike OSB. OSB is also more commonly used nowadays in residential construction than plywood for cost reasons.
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