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Strained p-MOSFETs with silicon-germanium (SiGe) source and drain (S/D) stressors were fabricated on thin-body silicon-on-insulator (SOI) substrate using a novel local oxidation or Ge condensation technique. By directly growing SiGe on the S/D regions and followed by a local Ge condensation process, the challenges imposed on Si recess etch on thin-body SOI substrates can be alleviated. In the Ge condensation step, the Ge content in the S/D regions may also be increased. At a gate overdrive of -1 V, strained p-MOSFETs show an enhancement in the saturation drive current Ion of up to 38% over the control p-MOSFETs. This significant Ion enhancement is attributed to strain-induced band structure modification, which reduces the hole effective mass along the transport direction. The improved series resistance of the strained devices with SiGe S/D accounted for approximately one-third of the Ion enhancement.