The present invention provides a semiconductor device and a manufacturing method thereof. The semiconductor device includes a semiconductor substrate with a memory cell region and a peripheral region, a gate line in the peripheral region, an etch-stop layer covering the gate line and the semiconductor substrate, a first insulating layer covering the etch-stop layer, two contact plugs disposed on the semiconductor substrate in the peripheral region, two pads disposed on the contact plugs respectively, and a second insulating layer disposed between the pads. The contact plugs are located at two sides of the gate line respectively, and the contact plugs penetrate through the etch-stop layer and the first insulating layer to contact the semiconductor substrate. The second insulating layer is not in contact with the etch-stop layer.