Microsoft places further Xbox 360 chip orders

Microsoft is set to move the manufacturing of the Xbox 360's CPUs to a more advanced 65 nanometre process, and has signed a new agreement with Singapore-based Chartered Semiconductor to build the chips using its advanced Silicon-On-Insulator technology.

Chartered Semiconductor is currently manufacturing the CPU using 90nm SOI processes, and the upgrade in technology to 65nm will potentially reduce both heat and power consumption, as well as lowering manufacturing costs for Microsoft's next-generation console. The first consoles incorporating the new CPUs are set to appear in the first quarter of 2007.

Kay Chai Ang, SVP of fab operations at Chartered, commented: "We are excited to expand our manufacturing relationship with Microsoft and leverage the innovative 65nm SOI technology made available to us through our agreement with IBM. By working closely with IBM to enable manufacturing compatibility and dual-sourcing capability, our goal is to continue to be a reliable manufacturing source to Microsoft."

"We look forward to working with Chartered on the production of such an important component of our Xbox 360 system," added Larry Yang, GM of Xbox console development at Microsoft. "We plan to continue with our strategy of dual sourcing from Chartered and IBM's fabs, which are operationally aligned and compatible, to give us the consistent product quality and flexibility we will need."

The move marks another step in Microsoft's concerted efforts to increase its production capacity for the Xbox 360, the company recently doubling Xbox 360 chip orders from several Taiwanese manufacturing partners, with Zhongshan-based Winstron Corp announcing an expansion of its manufacturing facility to meet the demand for 1m Xbox 360 consoles per month.