Taipei (Taiwan) - News about refreshed Xbox 360 consoles are trickling, which is about time given the fact that the console will celebrate its third birthday later this year. The Taiwan Economic News is reporting that first wafers with 65 nm GPUs are leaving the production lines, joining the 65 nm Xenon CPU. Rumors about a Blu-ray Xbox 360 remain alive and we are hearing first information about a possible mid-cycle refresh for the console, which will include the ’Valhalla’ SoC.

It has been almost a year since Chartered has begun taking the Xbox 360 Xenon CPU from 90 nm to 65 nm and it really was just a matter of time until other hardware would follow. According to the Taiwan Economic News, TSMC has initiated first wafer starts of the 65 nm Xenos GPU and Northbridge. Microsoft apparently has ordered 10,000 300 mm wafers from TSMC at this time.

As it is the case with any die-shrink, Microsoft should see substantial economic advantages from this move, supporting the company’s ongoing strategy to reduce the production cost of the console (the reduction of the Xbox 360 production cost has been one of the key reasons why Microsoft’s entertainment division has been able to notably increase its profits over the past seven quarters). If the 65 nm Xenos "v2" scales down linearly from 90 nm, the new die size should be around 125 mm2, while the eDRAM chip will remain at 70 mm2. The new production process should yield about 35% more GPUs per wafer than before.

TSMC will continue to be in charge of the wafers, while Nanya will be delivering the flip-chip packaging substrates. ASE combines the silicon and substrate and is responsible for QA.

Quite honestly, we were a bit surprised to hear that Microsoft did not decide to die-shrink both the CPU and GPU at the same time, especially because two different foundries are manufacturing the chips. However, our sources at TSMC explained that Microsoft has the same production philosophy as Nvidia: Wait for a manufacturing process to mature and then run the initial wafer order. Apparently, the transition was simulated in detail by ATI and the tapeout happened without problems, at least according to our sources close to ATI. Keep in mind that ATI is only a contracted partner for Microsoft: Both the CPU and GPU are officially Microsoft parts, and the Ballmer-Gates company is the only one in the console segment following through with such a strategy.

The Xbox 360 is scheduled to ship in an "all 65 nm" package (Jasper platform) this August. Consumers won’t notice the refresh, unless Microsoft decides to put a Blu-ray drive into the Xbox 360. We were not able to receive a confirmation either way, and we keep digging to find out if the Asustek subsidiary Pegatron will manufacture regular Xbox 360’s or units with an integrated Blu-ray drive. In any case, Celestica, Pegatron and Wistron will have a busy summer cranking out millions of refreshed Xbox 360 consoles.

A more dramatic and perhaps visible change will happen next year: TSMC plans to begin producing the Valhalla chip, which will be the foundation of the mid-cycle refresh of the Xbox 360, thus called ’Xbox 2.5’ or simply ’Xbox 540’ (360+180), in fall of 2009. We learned that this new chip is apparently much more than a die-shrink and end up as a system-on-a-chip design. This change is likely to enable to redesign the Xbox 360 casing and go towards a slim-design, much like what Sony did with the Gen1 and Gen2 PS2. We believe that TSMC will use a 45 nm process for this Multi-Chip-Module package (CPU+GPU+eDRAM).

There are also some interesting pieces of information that Microsoft is shopping for a more efficient cooling solution - efficient in more ways than just one: Several people close to the cooling industry told us that Microsoft approached them and asked for better and cheaper cooling than what is used in the Xbox 360 right now. Some may claim that the current Xbox 360 cooler design is already as cheap as it gets, but we have no doubts that Microsoft will find a way to drop the cost once again.

Source : Tom's Hardware US