IBM made a major announcement today that they will be offering 32nm chips to their partners in the second half of 2009. This would mean that, yes, the Xbox 360 could get even smaller chips than the 65nm "Falcon" CPUs..or the rumoured 45nm upgrade. We're talking power savings of 45% and speed boosts of 30% over IBM's last generation of hardware...it's flat-out better technology that will reduce the propensity of overheating drastically, and maybe even make way for a smaller console.
So it will be interesting to see if Microsoft opts to go with 45nm chips (available next year) and then 32nm chips, or ends up skipping one of these technologies. Most of us probably won't know the difference—actually, most of us will know the difference—but only because we're obsessing about it here. IBM, partners in 32nm device surge [via tvg]