Microoptical components, such as diffractive and refractive microlenses, micromirrors, beam splitter and beam combining have recently received considerable attention in the optics R&D centers and finally in the manufacturing community. This achievement is due to MEM technology that demonstrated major improvements in overall performance/cost of optical systems while offering the possibility of relatively rapid transition to products for military, industrial and consumer markets. Because of these technology advances, an industrial infrastructure is rapidly becoming established to provide combining microoptical components and MEM-based microactuators for on-chip optical processing. Optical systems that once were considered to be impractical due to the limitations of bulk optics can now easily be designed and fabricated with all required optical paths, signal conditioning, and electronic controls, integrated on a single chip. On-chip optical processing will enhance the performance of devices such as focal plane optical concentrator, smart actuators, color separation, beam shaping, FDDI switch, digital micromirror devices (DMDs), and miniature optical scanners. In this paper we review advances in microoptical components developed at Rockwell Science Center. We also review the potential of on-chip optical processing and recent achievement of free-space integrated optics and microoptical bench components developed at UCLA, and DMDs developed at Texas Instruments.