When light strikes a semiconductor p-n junction, its energy is absorbed by electrons. Electrons and holes generated by light in the p-n junction are swept by the junction electrical field. Consequently, the current flows through the junction.
The figure below illustrates the process of generating current in a photodiode.
The figure above is a p-n junction with a depletion layer without light. When the p-n junction is exposed to light, the impinging photons create electron-hole pairs everywhere in n-type area, p-type area, and depletion layer. In the depletion layer, the electric field accelerates electrons towards the n-layer and the holes toward the p-layer.
For the electron-hole pairs generated in the n-layer, the electrons, together with the electrons that have arrived from the p-layer, are left in the n-layer conduction band. The holes at this time are being diffused through the n-layer up to the depletion layer while being accelerated, and collected in the p-layer valence band. By this means, electron-hole pairs that are generated in proportion to the amount of incident light are collected in the n- and p-layers. This results in a positive charge in the p-layer and a negative charge in the n-layer. If an external circuit is connected between the p- and n-layers, electrons will flow away from the n-layer, and holes will flow away from the p-layer toward the opposite respective electrodes. As a result, current is generated.
Also read: How the Photoelectric Effect Influences Semiconductors
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