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Mode locking of semiconductor lasers as influenced by spontaneous emission is investigated. The magnitude of the spontaneous emission is determined from the number of axial modes above the half-power level of the free-running diode below and near threshold. A formula is developed which relates this noise source to that of the diode in an external resonator. It is shown that, without bandwidth limiting, the noise is large enough to impede mode locking. The SHG trace of a diode with no antireflection coating, mode locked in an external resonator, is predicted and compared with experiment.