More speculation has arisen on the Xbox 360 front following news that Singaporean chip maker Chartered Semiconductor Manufacturing will be producing a 45nm processor designed for use in video game consoles.

During a recent conference call, Chartered president and CEO Chia Song Hwee told analysts that the company has "customers' activity for products in the CPU space that goes into a video-game device." While the customer was not named, it should be noted that Chartered makes the processors used in Microsoft's Xbox 360 video game console.

Since the Xbox 360 is priced at a point less than its manufacturing cost, a newer and cheaper 45nm processor for the Xbox 360 console could give Microsoft a chance to either minimize their losses on the console or further lower its price point.

If the chip is indeed going to be used in the Xbox 360, console owners will have to wait a while. Chia has hinted that production of the new 45nm processor is not likely to begin until late next year or in early 2009.

Whatever the reason for Microsoft to move to 65nm tech-manufactured chips, it ain't happening any time soon. DigiTimes reports that the Taiwan-based chip manufacturer slated to manufacture them 65nm chips has pushed back plans to make said chips by at least one quarter.

Neither Microsoft Taiwan nor Chartered Semiconductor Manufacturing, the chip manufacturer, would comment on said report. This delay means that it won't be until the middle of 2007 at the earliest that we'll be seeing 65nm-made chips for the Xbox 360. Which means that it won't be until the second half of 2007 (again, at least) that that next generation of the next generation (a sub-generation? Or shall we call it Xbox 360.1?), running off the new chips, will roll off the production lines either.