Abstract
We describe a novel modulation scheme for dc SQUIDs in flux locked loop applications that cancels the effects of Josephson junction critical current fluctuations. The scheme involves switching the SQUID between three states and detecting the output at the second harmonic of the modulation frequency. With this scheme we have achieved a ten fold reduction of the low frequency flux noise spectral density over that obtained with a conventional flux locked loop readout. A dc SQUID with a 20 pH inductance had a resultant noise spectral density of 10-12 \Phi\min{0}\max{2} /Hz at 0.1 Hz, three times lower than the lowest flux noise previously reported for any SQUID system at this frequency.
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