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A two-dimensional effect in isolation structures is described. It is shown that the use of trench-like isolation structures significantly improves device electrical isolation, provided junction depths are less than the trench depth. A potential barrier exists at the corners of the isolation region that dominates the parasitic device's I-V characteristics. The subthreshold slope is found to be flatter and the threshold voltage is increased compared to conventional LOCOS structures. This significantly improves the isolation. Experimental results have verified the predictions of extensive computer simulations.