InxGa1-xAs devices have been widely researched for low power high frequency applications due to the outstanding electron mobility and small bandgap of the materials. Regrown source/drain technology is highly appreciated in InGaAs MOSFET, since it is able to reduce the thermal budget induced by ion implantation, as well as reduce the source/drain resistance. However, regrown source/drain technology has problems such as high parasitic capacitance and high electric field at gate edge towards the drain side, which will lead to large drain leakage current and compromise the frequency performance. To alleviate the drain leakage current problem for low power applications and to improve the high frequency performance, a novel Si3N4 sidewall structure was introduced to the InGaAs MOSFET. Device simulation was carried out with different newly proposed sidewall designs. The results showed that both the drain leakage current and the source/drain parasitic capacitance were reduced by applying Si3N4 sidewall together with InP extended layer in InGaAs MOSFET. The simulation results also suggested that the newly created “recessed” sidewall was able to bring about the most frequency favorable characteristic with no current sacrifice.