In some embodiments, the present disclosure relates to a method for forming a memory device, including forming a plurality of word line stacks respectively including a plurality of word lines alternatingly stacked with a plurality of insulating layers over a semiconductor substrate, forming a data storage layer along opposing sidewalls of the word line stacks, forming a channel layer along opposing sidewalls of the data storage layer, forming an inner insulating layer between inner sidewalls of the channel layer and including a first dielectric material, performing an isolation cut process including a first etching process through the inner insulating layer and the channel layer to form an isolation opening, forming an isolation structure filling the isolation opening and including a second dielectric material, performing a second etching process through the inner insulating layer on opposing sides of the isolation structure to form source/drain openings, and forming source/drain contacts in the source/drain openings.