The present disclosure provides a semiconductor device and a fabrication method thereof. The semiconductor device includes a substrate, a channel layer disposed on the substrate, and a barrier layer disposed on the channel layer. The semiconductor device further includes a dielectric layer disposed on the barrier layer and defining a first recess exposing a portion of the barrier layer. The semiconductor device further includes a first spacer disposed within the first recess, wherein the first spacer comprises a surface laterally connecting the dielectric layer to the barrier layer.