A combination of dead skin cells, seminal fluid and excess urine.
It's a natural process that starts during the mid-teen years. The dead skin cells are from the connective tissue that held the foreskin to the glans during childhood.
As soon as you hit your teens, this tissue breaks down which then allows you to retract your foreskin.
Smegma can be washed out with plain water. Make sure you carefully retract your foreskin. Smegma usually builds up behind the inner end of the glans (just behind the bell-shaped tissue known as the corona). Soap isn't advised for use to keep skin irritation to a minimum, especially around such a sensitive area.
In case of smegma, circumcision isn't necessary. Smegma isn't a disease or a form of fungus. Just follow the above steps.
"You have a case of smegma. Just use plain water to wash it out."
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