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In this paper, we report the design and fabrication of 980-nm vertical-cavity surface-emitting lasers and arrays that provide high output power and low divergence angle without any additional collimating optics. The influence of the structure of the contact on the current density distribution inside the active region was analyzed using the 3-D finite-element method. Uniform current distribution is achieved by optimizing the diameter of the p-contact, and the consequent improvement in beam divergence and thermal behavior is shown. A low divergence angle of 5.4° is obtained for a single device with continuous-wave (CW) power of 1.46 W at room temperature. The 8 × 8 array shows a divergence angle of 10.2° at 4 A with a CW power of 1.95 W. In addition, the measured results were compared with the results from devices without optimization of current density distribution.