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Folded-cavity surface-emitting InGaAs-GaAs lasers (FCSELs) that employ high-quality internal 45/spl deg/ deflectors are demonstrated with low-threshold current density and high efficiency. A simplified process involving a stop etch to position the surface emitting output mirror close to the waveguide and ion-beam-etching (IBE) to form the 45/spl deg/ deflecting mirror is presented. FCSELs (cavity length 800 μm) with two 45/spl deg/ deflectors, are obtained with threshold current density as low as 112.5 A/cm2 and surface-emission external quantum efficiency as high as 65% (0.82 W/A). The additional loss contributed by the folded-cavity design is estimated as 4.2 cm/sup -1/.