TSMC signed up to provide chips for Xbox 2

The world's largest semiconductor manufacturer, TSMC, has extended an existing relationship with Microsoft to encompass the direct provision of chipsets for the Xbox 2 console.

It's expected that TSMC will provide the graphics chips for the console, which have been designed for Microsoft by Canadian graphics chipset maker ATI - the same company that is providing graphics solutions for the GameCube and Nintendo's next console, N5.

The announcement of this deal is the latest in a series of steps which have seen the Xbox 2 edge ever closer to becoming reality. It was revealed earlier this year that Microsoft has been discussing an outline specification for the new console with several key developers.

It's expected that Microsoft will launch the Xbox 2 in late 2005 - a timeline which would probably make it the first to market of the next generation systems by a significant amount, with rival systems from Nintendo and Sony not expected to appear until 2006.