The optical proximity effect (OPE) is one of the most serious problems, as the optical lithography is pushed into the smaller feature size below the exposure wavelength. Some of the typical ways to solve this problem are to use the optical proximity correction (OPC) and the phase shift mask (PSM). However, these sophisticated techniques increase the cost of making masks, as well as the risk of getting defects on the masks. In this study we optimize the annular off-axis illumination (OAI) conditions to reduce the Isolated-Dense bias (IDB), in order to improve the resolution and the depth of focus (DOF) as a solution to fight for OPE. Through the simulation done with AIMS Fab 248 exposure system, the energy distribution on the photo-resist is analyzed with the intensity distribution across the simulated exposure images. The optimization is performed with the aid of Taguchi method. On the basis of the simulation analysis, the optimum optical parameters (the numerical aperture NA, the degree of coherence Sigma, and the ratio of the inner and the outer radii of the rings Annular) are selected to obtain the high resolution and enough DOF to reduce IDB value. The low IDB can be realized by using optimal optical parameters before exposure processes, without using sophisticated OPC and PSM on the masks.