A 65nm production process has reportedly now been adopted for the Xbox 360's graphics processing unit. Currently 360s feature 90nm GPUs. The smaller chip will be used in the revised 'Jasper' motherboard-based Xbox 360, apparently scheduled to ship in August.

The 65nm production process has already been adopted for the 360's central processing unit in the 'Falcon' model of the 360.

So how, you may be wondering, does a microscopically smaller chip affect the consumer? Well, for one the process is cheaper thanks to the higher yield of chips the process produces. It's cost cutting like the reduction of chip sizes that enables hardware manufacturers to reduce the cost of their consoles.

For two, a smaller chip is easier to cool, which could help resolve the 360's infamous Red Ring of Death, console-killing problem.

The chips are reportedly being produced by Taiwan Semiconductor Manufacturing Co. (TSMC), Advanced Semiconductor Engineering Inc. (ASE) and Nanya PCB Corp.

^{Sources: CENS, Daily Tech}