Si-rich amorphous silicon carbide thin films were prepared by magnetron cosputtering and were subsequently annealed to form Si nanocrystals embedded in a SiC matrix. A sputter target consisted of a patterned Si wafer on top of a carbon target. The ratio of carbon to silicon in deposited films was adjusted by means of a different silicon wafer open area. X-ray photoelectron spectroscopy spectra show that various compositions were obtained by changing the sputtered area ratio of carbon to silicon target. Analysis of atomic force microscopy shows that surface roughness increases significantly after annealing. Transmission electron microscopy reveals that Si nanocrystals do not form at temperatures less than 800 degrees C, while they are clearly established, with sizes ranging from 3 to 7 nm, as the temperature is at 1100 degrees C. IR spectra show that increase in annealing temperature for the Si-rich Si1-xCx (x<0.5) films favors the formation of Si-C bonds and increase of the short-range order. Optical studies show a blueshift of the optical absorption edge in transmission spectra and increase in the optical band gap with increasing annealing temperature. Optical band gaps upon annealing were correlated with increasing Si-C bond density and ordering in the SiC matrix due to structural relaxation of the films. (c) 2007 American Vacuum Society.