Basically plywood is made by layering a number of thin slices of wood (called veneer) together. These layers of wood are created from a log by a machine that basically peels a thin layer of wood away. The wood is then cut to the correct dimensions and allowed to dry. Once the wood is suitably dry it is layered together so that the grain of each layer is at a 90 degree angle to the last (called cross-graining). This protects the wood from splitting and reduces expansion or shrinkage. After the wood is layered to a suitable thickness each sheet is glued together with a special glue,(MR,WBP GLUE) urea-formaldehyde for indoor use and phenol-formaldehyde for outdoor use. In the final process the newly glued plywood is baked at 140 °C (284 °F) at a specific pressure to form the finished panel. The plywood is then patched, cut, sanded and refinished for shipping.
It’s categorized by number of layers and type. Plywood comes in 3 to 13 layers.
3-ply is one of the most common types of plywood. This kind has three layers of veneer and is layered enough to be strong and durable but can look more decorative than plywood with more plies, making it a good choice for indoor use.
4-ply pieces of wood have four layers of veneers.This is one special type of plywood manufactured in Linyi city of China. Its thickness ranges from 2.0mm to 4.6mm.
5-ply pieces of wood have five layers of veneers. This is another common type of plywood used for projects that require less durability and strength than those needed for exterior use.
Multi-ply plywood is mostly for exterior use and roofing. It can comprise several veneers, usually seven or more, to create an incredibly strong, unyielding frame for a home that can stand up to wind and damage.
Source: How is plywood made?