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We have integrated lithographically patterned VO2 thin films grown by pulsed laser deposition with silicon-on-insulator photonic waveguides to demonstrate a compact in-line absorption modulator for use in photonic circuits. Using single-mode waveguides at lambda=1550 nm, we show optical modulation of the guided transverse-electric mode of more than 6.5 dB with 2 dB insertion loss over a 2-microm active device length. Loss is determined for devices fabricated on waveguide ring resonators by measuring the resonator spectral response, and a sharp decrease in resonator quality factor is observed above 70 degrees C, consistent with switching of VO2 to its metallic phase. A computational study of device geometry is also presented, and we show that it is possible to more than double the modulation depth with modified device structures.