A method for making a semiconductor device may include forming a dummy gate above a semiconductor layer on an insulating layer, forming sidewall spacers above the semiconductor layer and on opposing sides of the dummy gate, forming source and drain regions on opposing sides of the sidewall spacers, and removing the dummy gate and underlying portions of the semiconductor layer between the sidewall spacers to provide a thinned channel region having a thickness less than a remainder of the semiconductor layer outside the thinned channel region. The method may further include forming a replacement gate stack over the thinned channel region and between the sidewall spacers and having a lower portion extending below a level of adjacent bottom portions of the sidewall spacers.