A transistor used for a semiconductor device for high power application needs to have a channel region for obtaining higher drain current. As an example of such a transistor, a vertical (trench type) transistor has been considered; however, the vertical transistor cannot have a high on/off ratio of drain current and thus cannot have favorable transistor characteristics. Over a substrate having conductivity, an oxide semiconductor layer having a surface having a dotted pattern of a plurality of island-shaped regions with a tapered shape in a cross section is sandwiched between a first electrode formed between the substrate and the oxide semiconductor layer and a second electrode formed over the oxide semiconductor layer, and a conductive layer functioning as a gate electrode is formed on the side surface of the island-shaped region in the oxide semiconductor layer with an insulating layer provided therebetween.