A novel ultrahigh-speed all-optical demultiplexer (DMUX) with polarization-shift-keying (PolSK) modulation input signals is proposed. This design is based on four-wave mixing (FWM) in a semiconductor optical amplifier (SOA). For analyzing each amplifier, we use finite-difference method (FDM) based on solution of the traveling wave coupled equations. Using numerical simulation, the all-optical DMUX is theoretically realized at 40 Gb/s. We also study the relation between optical confinement factor and thickness of active layer of the SOA section successfully, and investigate the increasing effect of confinement factor on the DMUX optical output power. With this work, the confinement factor is increased from 0.3 to 0.48, and as a result, the output power approximately twice ofits initial value is achieved. Moreover, the effects of polarization dependence of SOA on the output performance of all-optical DMUX for PolSK signal are theoretically investigated in detail.