An interferometer which incorporates a single mode VCSEL to facilitate miniaturization through integration of parts. The interferometer includes a beam splitter for partially reflecting and transmitting light; a single mode vertical-cavity surface-emitting laser for generating a beam of light perpendicular to a wafer; a first mirror fixedly perpendicular to the first path to reflect the portion of light reflected from the beam splitter; a second mirror movably arranged along the second path to reflect the beam portion transmitted through the beam splitter. A photodetector arranged along the second path detects the beam portion reflected from the first mirror and transmitted again through the beam splitter and the beam portion reflected from the second mirror and reflected again from the beam splitter to locate the second mirror based on an interference fringe created by a difference in the paths between the two beam portions.