The invention discloses a semiconductor device and a manufacturing method thereof. The device comprises a substrate, a multi-layer semiconductor layer positioned on the substrate, a source electrode and a drain electrode positioned on the multi-layer semiconductor layer, a grid electrode positioned between the source electrode and the drain electrode, as well as a dielectric layer positioned on at least one part of the surface of the multi-layer semiconductor layer arranged between the grid electrode and the drain electrode and a source field plate positioned on the dielectric layer, wherein a groove is formed in the dielectric layer, the source field plate is electrically connected to the source electrode through at least one conductive path, and the source field plate completely or partially covers the groove in the dielectric layer. The semiconductor device and the manufacturing method thereof provided by the invention have the advantages that the source field plate is given a full play, grid source capacitance Cgs is reduced, a peak value electric field at the edge of the grid electrode is reduced, the breakdown voltage of the device is improved, the grid leakage current of the device is reduced, the frequency characteristic of the device is improved, and the advantage of the high output power of the device is fully played.