The P-N junction Diode:-

P side of P-N junction has holes as a majority charge carriers and electrons as a minority charge carriers whereas N side has electrons as a majority charge carriers and holes as a minority charge carriers. Holes diffuse from P side to N side whereas electrons diffuse from N side to P side.

As the two halves were electrically neutral in the beginning, diffusion of holes towards the right and diffusion of electrons towards left make the right half positively charged and the left half negatively charged. This creates an electric field near the junction from right to the left. Any hole near the junction is pushed by the electric field into the left half. Similarly any conduction electron near the junction is pushed by the electric field into right half. Thus no charge carrier can remain in small region near the junction. This region is called the Depletion layer.

Diffusion Current:

Electric field at the junction exerts a force on the holes towards the left as they come to the depletion layer. Only those holes which start moving towards the right with a high kinetic energy are able to cross the junction. Similarly only energetic electrons are able to cross the junction. The movement of holes and electrons forms diffusion current. The magnitude of diffusion current is very small.

Drift Current:

Because of thermal collisions occasionally a covalent bond is broken and the electron jumps to the conduction band. An electron-hole pair is thus created. Also occasionally destroyed. These processes continue in every part of the material. However, if an electron-hole pair is created in the depletion region, the electron is quickly pushed by the electric field towards N side and the hole towards P-side. This makes a current from the N side to the P side. This is called the drift current.

The drift current and the diffusion current are in opposite directions. In steady state the diffusion current equals the drift current in magnitude and there is no transfer of charge at any cross-section.