A synthetic anti-ferromagnetic (SyAF) layer 105 is disposed under the reference layer 106 or at one side of the reference layer 106 opposite to the free layer 108. The SyAF layer 105 is made of ferromagnetic materials having constrained or “fixed” magnetization directions. This “fixed” magnetization direction can be achieved in some cases by an initializing exposure to a high magnetic field after the entire chip is manufactured. As an example, the SyAF layer 105 may comprise a pair of pinning layers including a first pinning layer 114 and a second pinning layer 118. The first pinning layer 114 and the second pinning layer 118 may have opposite magnetization directions aligned with the magnetization direction of the reference layer 106. Using the same example given above, the first pinning layer has the same “up” magnetization direction with the reference layer. The second pinning layer has an opposite “down” magnetization direction aligned and is anti-paralleled with the magnetization direction of the reference layer 106. An interlayer spacer layer 116 is disposed between the first pinning layer 114 and the second pinning layer 118. The interlayer spacer layer 116 can be an anti-parallel coupling (APC) layer that causes an interexchange coupling (IEC) between the first pinning layer 114 and the second pinning layer 118 such that the first pinning layer 114 and the second pinning layer 118 have anti-parallel magnetic directions and stable each other. As an example, the interlayer spacer layer 116 may comprise ruthenium (Ru) or Iridium (Ir). The first pinning layer 114 may include cobalt layers and nickel layers one stacked above another (Co/Ni)_m. The first pinning layer 114 may also be cobalt palladium stack (Co/Pd)_m, or cobalt platinum stack (Co/Pt)_m, where m can be a positive integer. The second pinning layer 118 may comprise a reverse of the compositions of the first pinning layer 114 with the same or different amount of layers. For example, the second pinning layer 118 may include nickel layers and cobalt layers one stacked above another (Ni/Co)_n, or palladium cobalt stack ((Pd/Co)_n, or platinum cobalt stack (Pt/Co)_n, where n can be a positive integer. A transition layer 112 may be disposed between the first pinning layer 114 and the reference layer 106. The transition layer 112 is made of non-magnetic materials and is configured as a buffer layer, a lattice match layer, and/or a diffusion barrier. As an example, the transition layer 112 may comprise tantalum (Ta), tungsten (W), molybdenum (Mo), Hafnium (Hf), or CoFeW.