An improved trench structure, and method for its fabrication are disclosed. Embodiments of the present invention provide a trench in which the collar portion has an air gap instead of a solid oxide collar. The air gap provides a lower dielectric constant. Embodiments of the present invention can therefore be used to make higher-performance devices (due to reduced parasitic leakage), or smaller devices, due to the ability to use a thinner collar to achieve the same performance as a thicker collar comprised only of oxide (with no air gap). Alternatively, a design choice can be made to achieve a combination of improved performance and reduced size, depending on the application.