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A Vertical-Cavity Surface-Emitting Laser is a semiconductor laser. That means it is a laser that generates light through excited silicon in a chip, not in a gas or crystal. Laser light has been generated in a silicon chip for quite some time now, but the VCSEL is special in that the light comes out of the top of the chip, instead of from the side.

Older chip lasers generated their light parallel to the boundaries between the layers of material they were made of. A wafer of laser silicon was created using standard deposition techniques (laying down microscopic layers of stuff to build up the desired mix), then diced to make laser chips where the laser light comes out of the edge.

A VCSEL is created in a similar fashion, but in a manner that a pit is left in the top for the laser light to come out (this is an oversimplification.) It emits its laser energy perpendicular to the boundary layers in the chip. It is not only more convenient that way, it is more efficient

There are several advantages to having your laser light come out of the top of your laser chip. For one, it is cheaper to make. When you make a wafer of chips, sometimes (heck, often) there are flaws in individual chips, and those have to be thrown away. With edge-emitting chips, you have to cut the wafer into chips before you can test them. Since VCSELs are top-emitting, you can test them before you cut. It is harder to test a pile of cut chips than it is to test them before you cut, because an automated machine can just press a set of contacts onto each spot on the wafer, and mark any chips that failed so they can be chucked as soon as you dice the wafer. This lets you save money and time by only finishing the good chips instead of having to cut and prepare all the chips before you can test them.

Another advantage is that it is easier to mate the chip to the circuit board and lens assemblies and such. Edge-emitting devices have to go on the edge of the board, and since the chip would have to be held perpendicular to the lens, alignment is more difficult. Having a flat surface with a laser beam coming out of it is much more easy to work with.

VCSELs emit energy in the infrared range, not as visible light. That's actually not a problem, as most applications for lasers are communications and sensing apps, where visible light isn't needed (and often, isn't wanted.)

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