Sub-monolayer Co deposition on clean Si(111)–(7×7) surfaces has been found to form nanoscale CoSi2 islands with a surrounding trench of one Si bilayer depth and mainly hexagonal shape. The trench surface structure is largely like that of the disordered ‘1×1’ phase of the Si(111)-7×7↔‘1×1’ phase transition and comprises mostly disordered Si adatoms with small ordered patches of (11×11), (9×9), c(5×√5), c(4×4) and (2×2) structures along with some Co-ring clusters. This disordered ‘1×1’ structure within the trench has formed at 600°C, the growth temperature of CoSi2 in reactive deposition epitaxy, much below the order–disorder phase transition temperature on Si(111)–(7×7). The structure around the trench remains (7×7). Electronically the trench is semiconducting. The surrounding 7×7 structure being metallic, the island–trench structure forms a lateral metal–semiconductor–metal structure.