As a base substrate, a substrate having an insulating surface such as a glass substrate is used. Then, a single crystal semiconductor layer is formed over the base substrate with the use of a large-sized semiconductor substrate. Note that, it is preferable that the base substrate be provided with a plurality of single crystal semiconductor layers. After that, the single crystal semiconductor layers are cut to divide the single crystal semiconductor layers into a plurality of single crystal semiconductor regions by patterning. Next, the single crystal semiconductor regions are irradiated with laser light or heat treatment is performed on the single crystal semiconductor regions in order to improve the planarity of surfaces and reduce defects. Peripheral portions of the single crystal semiconductor regions are not used as semiconductor elements, and central portions of the single crystal semiconductor regions are used as the semiconductor elements.