forming a thin film transistor having a gate insulating film, a gate electrode and a semiconductor layer having a source region, a drain region and a channel forming region between the source and drain regions over a first substrate with an insulating surface;

forming an insulating film over the thin film transistor;

selectively forming a first electrode over the insulating film;

forming an opening disposed above the source region or the drain region by selectively removing the insulating film;

forming a contact hole reaching the source region or the drain region by selectively removing the gate insulating film;

forming a conductive film on the first electrode and the insulating film;

forming a source electrode or a drain electrode reaching the source region or the drain region, and a depression in the insulating film by selectively removing the conductive film and the insulating film;

forming a partition wall covering the source electrode or the drain electrode, an end portion of the first electrode, and the depression in the insulating film;

forming a layer containing an organic compound on the first electrode;

forming a second electrode on the layer containing an organic compound; and

encapsulating a display element including the first electrode, the layer containing an organic compound and the second electrode over the first substrate by pasting a second substrate to the first substrate with a sealant surrounding a peripheral portion of the display element.