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Impacts of silicon nitride (SiN)-capping layer and the associated deposition process on the device characteristics and hot-electron degradation of nMOSFETs are investigated in this paper. The SiN layer used to induce channel strain for mobility enhancement was deposited by a low-pressure chemical vapor deposition. The deposition of the SiN aggravates threshold-voltage roll-off due to additional thermal budget and the strain effect. It is also found that the device hot-electron degradation is worse with the addition of the SiN capping. Furthermore, our results indicate that both the bandgap narrowing caused by the channel strain and the abundant hydrogen species from the precursors of SiN deposition contribute to the aggravated hot-electron effect.