A diode is a semiconductor device that essentially acts as a one-way switch for current. It allows current to flow easily in one direction, but severely restricts current from flowing in the opposite direction. ... When a diode is reverse-biased, it acts as an insulator and does not permit current to flow A transistor is a semiconductor device used to amplify or switch electronic signals and electrical power. Transistors are one of the basic building blocks of modern electronics. It is composed of semiconductor material usually with at least three terminals for connection to an external circuit