An anonymous source informed us today that Microsoft and IBM have signed a multi-million dollar agreement under which IBM Microelectronics will manufacture a next generation CPU for the Xbox 2. Work on the new processor has already started, but the deal was inked just a few days ago.
Who is designing the chip? At this point, we don't know. We assume that the chip would be built at the East Fishkill plant. This is IBM's most state-of-the-art fabrication facility.
We also don't know if the chip will be manufactured using current 0.13 micron (a micron is a millionth of a meter) process technology or the upcoming 90nm fabrication process.
At the moment we have no official confirmations about this information so take it for what it's worth. A Microsoft spokesman was unavailable for comment at the time of posting this story. We'll certainly have more as things develop.
News source: TeamXbox