Q. What is a tunnel diode?
A. A tunnel diode has an extremely thin insulating layer between the P and N material. We normally can think of electrons as little points of mass with a negative electric field surrounding them. The real picture is more complicated. Electrons not only have charge and mass, they have a wavelength.
In a tunnel diode, the insulating layer is thin compared to the wavelength of an electron. Normally, an electron can't get through an insulator. But in the tunnel diode electrons can sort of pop through the insulating layer due to their wavelike property. This gives the tunnel diode a property called "negative resistance." In ordinary resistance, as we increase the voltage across the resistor, the current increases along with it. In a negative resistance, the opposite happens. As we increase the voltage, the current decreases. This makes the tunnel diode useful as an oscillator.
The tunnel diode can also be used as a very fast switch in digital circuits. The reason it is called a "tunnel" diode comes from a graph of the energy of the barrier voltage at the diode's junction. This graph rises to a peak at the junction. The graph for an electron that pops through the insulating layers looks like a little tunnel cut through the peak of the curve.