Singapore-based Chartered Semiconductor Manufacturing and Microsoft jointly announced today that Microsoft will incorporate Chartered's 65-nanometer (nm) Silicon-on-Insulator (SOI) semiconductor technology into the Xbox 360 console. The first Xbox 360 units to use the more advanced 65-nm CPU will be produced starting in the first quarter of 2007.

Chartered is already working with Microsoft, through an agreement with IBM, producing 90-nm SOI CPU products since the Xbox 360's launch. However, by switching to the 65-nm technology Microsoft may be able to reduce the power consumption and the amount of heat produced by the Xbox 360, which could in turn alleviate some of the overheating and crashing issues that have occasionally been a problem for some 360 owners. Furthermore, upgrading to 65-nm CPUs should allow Microsoft to eventually lower its manufacturing costs for the Xbox 360.

There's also potential for a slight increase to the CPU's speed. "SOI refers to placing a thin layer of silicon on top of an insulator, such as silicon oxide or glass. The transistors (switches that are used in microprocessors) are then built on top of this thin layer of SOI. The basic idea is that the SOI layer reduces the capacitance of the switch, so it operates faster," explained Chartered.

"We look forward to working with Chartered on the production of such an important component of our Xbox 360 system," commented Larry Yang, General Manager of Xbox Console Development at Microsoft. "Chartered's ability to demonstrate the manufacturability of IBM's advanced SOI technology in Fab 7 was key to our selection. 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."

"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," said Kay Chai "KC" Ang, senior vice president of fab operations at Chartered. "This is both a recognition of Chartered's 300mm manufacturing excellence and increasing customer confidence in our ability to enable cutting-edge technologies as products transition to 65nm. 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."

"Together, Chartered and IBM offer a unique dual source capability that delivers superior redundancy and flexibility," added Jim Comfort, vice president, Microsoft Client Executive, IBM. "Chartered's decision to adopt our advanced Silicon on Insulator technology at 65nm is further evidence of the success of the IBM/Chartered Common Platform strategy."

The PlayStation 3's highly touted Cell processor is also expected to eventually be 65-nm.