A method includes forming a first semiconductor layer over a substrate. A second semiconductor layer is formed over the first semiconductor layer. The first semiconductor layer and the second semiconductor layer are etched to form a fin structure that extends from the substrate. The fin structure has a remaining portion of first semiconductor layer and a remaining portion of the second semiconductor layer atop the remaining portion of the first semiconductor layer. A capping layer is formed to wrap around three sides of the fin structure. At least a portion of the capping layer and at least a portion of the remaining portion of the second semiconductor layer in the fin structure are oxidized to form an oxide layer wrapping around three sides of the fin structure.