This paper presents a new type of optical encoder which generates a quadrature signal with resolution of 1/8 wavelength of the laser source. The sensor is composed of two diffraction gratings with the period of 4μm and 6μm, which has step difference 86nm, so that the signals generated from two diffraction gratings have about 90° phase difference. The simulation and experiment results for displacement measurement show the validity of the proposed optical encoder.

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