Polycrystalline silicon–silicon dioxide–silicon capacitors were annealed in argon and argon containing oxygen ambients in a rapid thermal annealer. Capacitance–voltage (C–V) characteristics were determined before and after anneal as a function of annealing time at 1100 and 1200 °C.C–Vcharacteristics of the capacitors annealed in argon degraded with increased annealing time and temperature. At 1100 °C oxide capacitance decreased and oxide leakage occurred. At 1200 °C the annealing resulted in catastrophe, capacitance decreased by more than factor of ten. Careful examination of the thin oxide layer, after selective removal of the polysilicon film, showed holes in the oxide, hole density increasing with time and temperature. On the other hand,C–Vcharacteristics of capacitors, annealed in argon containing oxygen, had no significant change after anneal at 1100 °C. Also defect density was extremely low. TheC–Vcharacteristics of capacitors annealed in pure argon can be recovered by the anneal in oxygen ambient. Thermal oxide films on silicon wafers were annealed in argon at high temperatures. Formation and lateral growth of physical holes in the oxide layer was found. The linear relation between the size of hole and annealing time was verified. Results are discussed in terms of thermodynamic stability of silicon dioxide on silicon in inert and oxidizing mediums.