Provided is a method of manufacturing a semiconductor device, by which a cell transistor formed on a cell array area of a semiconductor substrate employs a structure in which an electrode in the shape of spacers is used to form a gate and a multi-bit operation is possible using localized bits, and transistors having structures optimized to satisfy different requirements depending upon functions of the transistors can be formed on a peripheral circuit area which is the residual area of the semiconductor substrate. In this method, a cell transistor is formed on the cell array area. The cell transistor includes a notch gate structure, a first channel region formed on a semiconductor substrate under the notch gate structure, a source region and a drain region formed on both sides of the first channel region, a first gate insulation film formed between the first channel region and the notch gate structure, and a memory layer locally formed on areas adjacent to the source and drain regions between the first channel region and the notch gate structure. At the same time that the cell transistor is formed, a plurality of peripheral circuit transistors including at least one transistor having a different structure from the cell transistor are formed on the peripheral circuit area.