Sheathing

Sheathing is the panel layer nailed across the outside of the studs and over the rafters or trusses. The code calls the material a wood structural panel, which means plywood, oriented strand board (OSB), or a composite panel bonded with waterproof resin. It turns a frame of separate sticks into one connected shell.

The structural work happens in the nailing. Studs alone cannot resist racking, the sideways lean a wall takes in a windstorm. APA, the engineered wood trade group, puts it plainly: wall bracing keeps walls square during wind events. Sheathing is how most homes get that bracing. Table R602.10.4 lists Method WSP, wood structural panel, at a 3/8-inch minimum with nails 6 inches apart at panel edges and 12 inches in the field. Nail that pattern and the panel becomes a braced wall panel, the prescriptive path. An engineered shear wall does the same job with a designer's calculations instead of a table.

On Arizona walls, sheathing sits under the water-resistive barrier, which sits under the stucco. Three-coat stucco normally goes over structural sheathing and two layers of Grade D paper. One-coat systems change the stack. Rigid foam goes over the framing, the lath fastens through it, and IRC Section R703.7.3.1 lets a single 60-minute paper replace two layers when foam or a drainage space separates it from the stucco. The Building America Solution Center puts the water control layer behind the foam and over the sheathing, and flashes every window to that layer before the foam goes on.

Foam is insulation, not bracing. For example, on a Cave Creek home with a foam-backed stucco wall, the plans still show wood structural panels at each braced wall line, because foam adds nothing to racking resistance.

Sheathing is not siding and not the barrier. It is the structure under both. Roof sheathing follows Section R803, and that deck is what your tile underlayment fastens to.