A method of forming a semiconductor device includes forming a semiconductor strip extending above a semiconductor substrate, forming shallow trench isolation (STI) regions on opposite sides of the semiconductor strip, recessing a portion of the semiconductor strip, etching the STI regions to form a recess in the STI regions, forming a first thermal conductive layer in the recess, forming a source/drain epitaxy structure on the first thermal conductive layer, and forming a gate stack across the semiconductor strip and extending over the STI regions.