A semiconductor device with an embedded schottky diode and a manufacturing method thereof are provided. A semiconductor device having a schottky diode include: an epilayer of a first conductivity type, a body layer of a second conductivity type, and a source layer of the first conductivity type arranged in that order; a gate trench that extends from the source layer to a part of the epilayer; a body trench formed a predetermined distance from the gate trench and extends from the source layer to a part of the epilayer; and a guard ring of the second conductivity type that contacts an outer wall of the body trench and formed in the epilayer.