Application form of and demand for an IC chip formed with a silicon wafer are expected to increase, and further reduction in cost is required. An object of the invention is to provide a structure of an IC chip and a process capable of producing at a lower cost. In view of the above described object, one feature of the invention is to provide the steps of forming a separation layer over an insulating substrate and forming a thin film integrated circuit having a semiconductor film as an active region over the separation layer, wherein the thin film integrated circuit is not separated. There is less limitation on the shape of a mother substrate in the case of using the insulating substrate, when compared with the case of taking a chip out of a circular silicon wafer. Accordingly, reduction in cost of an IC chip can be achieved.