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A new degradation behavior of LDD N-MOSFETs during dynamic hot-carrier stress is presented. Increased degradation occurs during the gate pulse transition, and involves hot-hole injection that initially begins in the oxide-spacer region, and later propagates to the channel region. Experimental results clearly show that increased degradation of the linear drain current and transconductance is mainly due to hole-induced interface traps in the oxide-spacer region. Electron trapping at hole-induced oxide defects, on the other hand, is mainly responsible for the enhanced threshold voltage shift in the late stage, when hole injection coincides with electron injection in the channel region.