A semiconductor device includes a substrate; an isolation structure over the substrate; two first fins in an N-type region of the semiconductor device; and two second fins in a P-type region of the semiconductor device. Each of the two first fins has a channel region and two source/drain (S/D) regions sandwiching the channel region. The semiconductor device further includes a gate stack engaging the channel regions of the two first fins; and four S/D features over the S/D regions of the two first fins. Each of the four S/D features includes a lower portion and an upper portion over the lower portion. Each of the lower portions of the four S/D features has a cross-sectional profile that is wider at its bottom than at its top. The upper portions of the four S/D features merge into two merged S/D features with one on each side of the gate stack.