Manufacturing a semiconductor device avoiding an increase of transistor leak current or reduction of the withstanding voltage characteristics is by at least one of: The pad oxide film is removed along the substrate surface from the upper edge of the groove over a distance ranging from 5 to 40 nm: The exposed surface of the semiconductor substrate undergoes removal by isotropic etching within 20 nm; and oxidizing a groove portion formed in a semiconductor substrate in an oxidation environment with a gas ratio of hydrogen (H2) to oxygen (O2) being less than or equal to 0.5, an increase of the curvature radius beyond 3nm is achieved without associating the risk of creation of any level difference on the substrate surface at or near the upper groove edge portions in a groove separation structure. This eliminates either an increase of transistor leak current or reduction of the withstanding voltage characteristics thereof otherwise occurring due to local electric field concentration near or around the terminate ends of a gate electrode film which in turn leads to an ability to improve electrical reliability of transistors used.