we present self-switching mechanism by Mach-Zehnder interferometer considering main nonlinear effects of semiconductor optical amplifiers (SOA). The input light signal is split unequally over the two arms where SOA's are placed and act as nonlinear phase shifter. We used finite difference beam propagation (FD-BPM) analytical method for MZI analysis and investigated the effect of nonlinear self phase modulation (SPM), linear gain, input power intensity and power splitting ratio on the Mach-Zehnder Interferometer (MZI) output taking into account all nonlinear effects of SOA like group velocity dispersion (GVD), Kerr effect, two photon absorption, carrier heating and spectral hole burning. In addition we showed the distortion of pulse shape and its spectrum because of SPM that can be used for multi picoseconds pulse shaping. Further we indicate red shift in picoseconds and blue shift in femtosecond and showed each of them takes place in MZI arms but only SPM can appear in MZI output. Therefore MZI can only create negative chirp in output and don't transfer positive chirp to interferometer output.
