Why does the depletion layer act as an insulator?

The depletion layer acts as an insulator because it is a region near the p-n junction that contains no free charge carriers.1

When a p-n junction is formed, electrons from the n-type side diffuse across the interface to fill holes in the p-type side. This process creates a region at the interface where the mobile charge carriers—electrons and holes—have effectively neutralized one another. Because this area is depleted of the free electrons and holes necessary to conduct electricity, it functions as an insulator that prevents the flow of current under equilibrium conditions.231

This insulating property is fundamental to the function of semiconductor devices, as it allows the junction to act as a rectifier. By applying an external voltage, the width of this depletion layer can be manipulated: forward bias narrows the layer to allow current flow, while reverse bias widens it to maintain the insulating state.12