In this study, phase shifting method is used to modify moire system into micro moire interferometer which can measure displacement field with highly improved sensitivity. Apart from existing micro moire technique, a low cost and less precise translation stage with rough resolution (10 mu m resolution) is adapted for the phase shifter. Least square algorithm is applied to estimate the arbitrary phase shifted amount and to minimize the errors induced by lowering the cost. Moreover, specimen grating is phase shifted instead of reference grating which enables simple construction from given moire system. To compensate for rigid body in-plane translation of specimen that may occur during phase shifting, pattern matching algorithm is put into practice to ensure pixel correspondence for each phase shifted images. To verify the newly constructed micro moire technique, local displacement fields of Fine pitch Ball Grid Array package and Wafer Level Chip Size Package with elevated sensitivity up to 26 nm per fringe was acquired. (C) 2004 Elsevier Ltd. All rights reserved.