A method of manufacturing a semiconductor device includes the steps of preparing a semiconductor substrate including a semiconductor layer having a first main surface and a second main surface located opposite to the first main surface and an epitaxial layer formed on the first main surface, forming a trench having a sidewall passing through the epitaxial layer and reaching the semiconductor layer and a bottom portion continuing to the sidewall and located in the semiconductor layer, decreasing a thickness of the semiconductor layer by grinding the second main surface, forming an electrode layer on the ground second main surface, achieving ohmic contact between the second main surface and the electrode layer by laser annealing, and obtaining individual substrates by forming a cutting portion along the trench and dividing the semiconductor substrate along the cutting portion.