A memory device includes a bottom electrode, an MTJ stack, and a top electrode. The bottom electrode has a lower sidewall and an upper sidewall above the lower sidewall and laterally set back from the lower sidewall. The MTJ stack is over the bottom electrode. The MTJ stack includes a bottom magnetic layer, a tunnel barrier layer over the bottom magnetic layer and a top magnetic layer over the tunnel barrier layer. The bottom magnetic layer has a sidewall coterminous with the upper sidewall of the bottom electrode. The top magnetic layer has a sidewall laterally set back from the upper sidewall of the bottom electrode. The top electrode is over the MTJ stack.