A method of forming a self-aligned contact structure with a locally etched
conductive layer comprises the steps of: preparing a substrate formed with
gate structures comprising a first conductive layer, a second conductive
layer, and an insulating layer; depositing a photoresist material layer on
the substrate; performing a lithographic step with a bit-line contact node
photomask or a bit-line contact photomask to expose a portion of the
surface of the substrate; etching the exposed second conductive layer with
an etchant; removing the remaining photoresist material layer; forming a
sidewall spacer on the sidewalls of each gate structure; forming a
dielectric layer to cover the substrate; and performing lithographic and
etching steps to remove the dielectric layer and to form self-aligned
contact structure.