A laser diode is a semiconductor device that transmits coherent and highly focused light through a process called stimulated emission. This characteristic makes laser beams extremely bright and concentrated. When electric current flows through the p-n junction, the gain is. The term LASER stands for Light Amplification by Stimulated Emission of Radiation. It works on the same basic principle as an LED, but with an internal structure that forces photons to align in phase and direction, producing coherent laser light instead of the. The laser diode chip is the small black chip at the front; a photodiode at the back is used to control output power.