Preparation of precision planar TEM specimen for failure analysis in microelectronics industry has become increasingly difficult as the critical dimensions of integrated circuits (ICs) continue to shrink down to deep sub-micron regime. Accurate defect localization and endpoint control of specimen final thinning are critical steps leading to successful specimens and defect characterization. Conventional dimple and ion-mill method becomes inadequate for this class of specimen preparation due to poor optical imaging resolution, non-planar polishing, lack of flexible ion beam control and in situ process monitoring for endpoint control. These problems are exacerbated by the high density and a wide range of materials found in IC device structures. In this paper we present a novel method employing dual-beam focused ion beam (FIB) which significantly improves upon these difficulties.