Integrated circuit structure including laterally recessed source/drain epitaxial region and method of forming same

The disclosure is directed to an integrated circuit structure. The integrated circuit structure may include: a first device region laterally adjacent to a second device region over a substrate, the first device region including a first fin and the second device region including a second fin; a first source/drain epitaxial region substantially surrounding at least a portion of the first fin; a spacer substantially surrounding the first source/drain epitaxial region, the spacer including an opening in a lateral end portion of the spacer such that the lateral end portion of the spacer overhangs a lateral end portion of the first source/drain epitaxial region; and a liner conformally coating the lateral end portion of the first source/drain epitaxial region beneath the overhanging lateral end portion of the spacer, wherein the liner includes an electrical insulator.