A semiconductor device including a lateral field-effect transistor and Schottky diode and method of forming the same. In one embodiment, the lateral field-effect transistor includes a buffer layer having a contact covering a substantial portion of a bottom surface thereof, a lateral channel above the buffer layer, another contact above the lateral channel, and an interconnect that connects the lateral channel to the buffer layer. The semiconductor device also includes a Schottky diode parallel-coupled to the lateral field-effect transistor including a cathode formed from another buffer layer interposed between the buffer layer and the lateral channel, a Schottky interconnect interposed between the another buffer layer and the another contact, and an anode formed on a surface of the Schottky interconnect operable to connect the anode to the another contact. The semiconductor device may also include an isolation layer interposed between the buffer layer and the lateral channel.