A p-n junction diode does not start conducting the moment even a tiny forward voltage is applied. Instead, current remains negligible until the applied forward voltage reaches a certain minimum value, after which current rises sharply. This minimum forward voltage is called the cut-in voltage (also known as the threshold voltage, knee voltage, or offset voltage) — approximately 0.2–0.3 V for germanium diodes and approximately 0.6–0.7 V for silicon diodes.

Why does this threshold exist? When a p-type and n-type semiconductor are joined, majority charge carriers diffuse across the junction (electrons from the n-side, holes from the p-side) until an equilibrium is reached. This diffusion leaves behind fixed, immobile ions on either side of the junction — positive ions on the n-side and negative ions on the p-side — creating a narrow region depleted of free charge carriers, called the depletion region. These fixed ionic charges set up an internal electric field directed from the n-side to the p-side, which corresponds to a built-in (barrier) potential, V₀, that opposes further diffusion of majority carriers across the junction.

• When forward bias is applied, the external voltage opposes this built-in barrier potential.
• As long as the applied forward voltage is smaller than the barrier potential, only a very small current flows (mainly due to minority carriers), because most carriers are still prevented from crossing the depletion region.
• Once the forward voltage becomes large enough to substantially neutralise/overcome the barrier potential, the depletion region narrows drastically, majority carriers can diffuse across freely, and the current increases sharply — this onset voltage is the cut-in voltage.

Thus, the cut-in voltage is a direct consequence of the depletion region's built-in barrier potential, which must be overcome before appreciable conduction can begin.

The remaining options do not explain this phenomenon: a diode certainly does not have infinite conductivity (if anything, it behaves almost like an open circuit below cut-in and like a low-resistance path above it); the atoms in the depletion region are not simply “neutral atoms without charge” — they are ionised donor and acceptor atoms that create the barrier field precisely because they carry fixed charge; and no external magnetic field is involved at all in the operation of a basic p-n junction diode — its behaviour is governed entirely by electric fields and carrier diffusion/drift within the semiconductor.