Plywood is made from layers of thin wood veneer glued together to form a solid sheet varying in thickness depending on how many layers of veneer are laminated together, with more layers resulting in a heavier, stronger sheet. Particle board is manufactured by combining small pieces of wood with a binding material and pressing or molding it into a sheet that solidifies when the binder dries. Because it is entirely an engineered product, particle board can be manufactured to exact size specifications.
In general, particle board is less expensive than plywood. The wood used to manufacture particle board is often the waste product of other manufacturing processes, while plywood veneer is a more costly material. Production of particle board is a more efficient process than that of plywood, so its overall production cost is lower as well. As a result of these differences, cabinets manufactured with particle board are typically less expensive than plywood cabinets.
Both plywood and particle board are sufficiently strong for cabinet construction, but plywood has a significant advantage in terms of tensile and shear strength. Plywood tends to be more resistant to water damage, and it is easier to repair if damaged. Because its laminated layers are laid out with alternating grain direction, plywood resists expansion and contraction, which occurs in the direction of the wood grain during changes in humidity and temperature. However, the highly varied grain direction of the wood material in particle board makes it even more resistant to expansion and contraction.
Both particle board and plywood are manufactured with glues containing urea formaldehyde, a chemical that poses a health hazard as it is gradually released into the air from the wood over time. Both products are made from wood products that can be claimed from environmentally responsible lumber operations, but particle board production is able to utilize waste material, making it a marginally more environmentally friendly option.