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Mode-hopping noise in index-guided semiconductor lasers is investigated. It is found that random switching between lasing modes and output power differences in those modes cause mode-hopping noise. An effective method to suppress such mode-hopping noise is proposed. High Te doping to an n-type GaAlAs cladding layer completely suppresses the noise. Te in GaAlAs forms a DX center that acts as a saturable absorber. This property stabilizes the laser mode and prevents mode competition. The minimum loss difference between lasing and nonlasing modes to suppress mode-hopping noise is also discussed.