Method of manufacturing semiconductor device

A method of manufacturing a semiconductor device includes forming a fin structure in which first semiconductor layers and second semiconductor layers are alternatively stacked, the first and second semiconductor layers having different material compositions; forming a sacrificial gate structure over the fin structure; forming a gate spacer on sidewalls of the sacrificial gate structure; etching a source/drain (S/D) region of the fin structure, which is not covered by the sacrificial gate structure and the gate spacer, thereby forming an S/D trench; laterally etching the first semiconductor layers through the S/D trench, thereby forming recesses; selectively depositing an insulating layer on surfaces of the first and second semiconductor layers exposed in the recesses and the S/D trench, but not on sidewalls of the gate spacer; and growing an S/D epitaxial feature in the S/D trench, thereby trapping air gaps in the recesses.