The present application discloses a semiconductor device with a recessed pad layer and a method for fabricating the semiconductor device. The semiconductor device includes a first die, a second die positioned on the first die, a pad layer positioned in the first die, a filler layer including an upper portion and a recessed portion, and a barrier layer positioned between the second die and the upper portion of the filler layer, between the first die and the upper portion of the filler layer, and between the pad layer and the recessed portion of the filler layer. The upper portion of the filler layer is positioned along the second die and the first die, and the recessed portion of the filler layer is extending from the upper portion and positioned in the pad layer.