English: Current-voltage (IV) curve of a negative differential resistance device, showing how it can amplify an AC signal applied to it. The diagram shows a negative diff. resistance device biased into its negative resistance region with a DC bias voltage V_bias, and an AC voltage Δv applied to it, showing the current and voltage waveforms across it.

In the negative resistance region an increase in voltage will cause a decrease in current, so Δi and Δv have opposite signs. Therefore the AC current and voltage waveforms across the device are 180° out of phase (indicated by the colored half-cycles). So the AC power dissipation in the device, the product of the AC voltage and current P_AC = ΔiΔv is negative, it produces power that is consumed by the external circuit. Therefore with the proper external circuit it can increase the power of an applied signal, amplifying it.

The AC power generated comes from the power carried by the DC bias current: P_DC = I_biasV_bias