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The measurement and affects of extremely low contact resistances on GaAs/AlGaAs modulation-doped FET's (MODFET's) were studied. Ohmic contacts were characterized by a variety of test structures in close proximity to each other. Measurements of front, end, and interfacial contact resistance were used to calculate the specific contact resistance by the transmission line model (TLM) and the two-dimensional resistor network model. The validity of these models in describing contacts to GaAs is discussed. Normalized contact resistance as low as 0.06 Ω . mm in MODFET's exhibiting semiconductor sheet resistance of 536 Ω/ are reported, contributing only 10 percent to the correspondingly reduced parasitic resistances. This leads to high extrinsic transconductances of 240mS/mm at 300 K in devices with a gate length of 1.4 µm and to extraordinary small drain-source saturation voltages of about 0.6 V. Both effects lead to much improved MODFET performance which would be not only advantageous in small-signal, but especially in high-speed/low-power logic circuits.