A semiconductor device includes an interconnect structure disposed over a first semiconductor die. The first semiconductor die includes a semiconductor substrate and a first conductive pad disposed over the semiconductor substrate, and the first conductive pad is covered by the interconnect structure. The semiconductor device also includes dielectric spacers surrounding the interconnect structure. An interface between the dielectric spacers and the interconnect structure is curved. The semiconductor device further includes a dielectric layer surrounding the dielectric spacers, and a second semiconductor die bonded to the dielectric layer and the interconnect structure. The second semiconductor die includes a second conductive pad, and the interconnect structure is covered by the second conductive pad.