The desire to fabricate very small semiconductor lasers requires that we address problems associated with surface recombination. We have proposed and demonstrated a segmented quantum well active region in which lateral diffusion is intentionally reduced. Such a structure should prevent the transfer of electrons and holes from the interior of a laser device to the edges. The supply of carriers to surface-related carrier traps can thus be eliminated, and we need not concern ourselves with the electrical quality of the surfaces. In this work we present calculations which predict laser performance for various lateral diffusion conditions. ©1997 American Institute of Physics.