Interference fringes of a laser diode Michelson interferometer are distorted by the external reflection of light to the laser diode. We demonstrate by a numerical model that one can stabilize the interference fringes by controlling chaos with a sinusoidal modulation of the injection current. We optimized the modulation frequency by referring to an AM power spectrum of the intrinsic fluctuation of a compound-cavity laser diode output and optimized the modulation depth by referring to a bifurcation diagram plotted against modulation depth. The controlled system with optimally tuned sinusoidal modulation is stable with changes in external power reflection. A small perturbation of dc bias of less than 2% can improve the stability of the interference fringes.
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