By Chris Nicholls

SAN FRANCISCO: IBM has announced a new smaller, cheaper and lower-power Cell processor will go into production for the Playstation 3 this year, a move which could result in lower PS3 prices.

The company announced the smaller chip at the International Solid States Circuit Conference in San Francisco yesterday. According to various preports, while the current Cell chip uses IBM’s 65nm SOI construction process, the new chip will use the company’s new 45nm technology to reduce size by 34 per cent, power consumption by 40 per cent and therefore cooling and packaging needs.

Reduced heat from the chip should also mean better reliability, according to IBM, leading to lower warranty claim costs for Sony.