In the optical filters, the light is fanned out at the entrance of the chip, comparable to the function of a prism, and guided through several optical fibers with slightly different lengths. Light interference causes individual wavelengths to be cancelled or amplified when the light signals are combined. This technique can be applied as an integrated technique, where further active or passive components can be integrated on the chip.
Arrayed waveguide gratings can be used in WDM systems as multiplexers and demultiplexers as well as for filtering out different wavelengths. An AWG filter can be integrated with an optical switch to form an optical add/drop multiplexer( OADM).
Besides AWGs with fixed wavelengths, there are also tunable AWG components where the propagation time of the individual wavelengths is influenced by temperature.