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     This story was printed from CdrInfo.com,

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Sony Corp's game division said it plans to start mass production of a new chip to power the PlayStation 2 (PS2) game console this month, using cutting-edge 90-nanometre processing technology, in a move that will lower manufacturing costs.

Monthly production of the chip, which combines the game console's microprocessor and graphics chip, will start at "several" hundred thousand units before growing to more than a million units by next year, Sony Computer Entertainment's Chief Technology Officer Kenshi Manabe said at an industry event.

Sony has invested more than 300 billion yen ($2.73 billion) since 1999 to develop and shrink the PS2 chips by almost 80 percent. By creating a smaller chip, Sony can produce more per 200 millimetre (eight inch) wafer and reduce costs.

Initially, Sony used 180 nanometre processing technology to manufacture the PS2 chips, but it has gradually moved to narrower circuitry in recent years. A nanometre is one-billionth of a metre.

The mass production of the PS2 chips using 90-nanometre technology comes one day after Sony said it planned to begin sales of PSX, an all-in-one game and entertainment system, in Japan this year at a minimum price of 79,800 yen ($719).

A Sony Computer Entertainment (SCE) official said later that the chips using 90-nanometre technology might be used in other Sony products, not just the PS2. Sony Computer Entertainment is a game unit of Sony.

Even as development work continues on the current generation of cutting-edge semiconductor chips, Sony's Manabe said the company plans to start installing equipment at a new plant that is creating a next-generation microprocessor code-named "cell".

Sony plans to invest 500 billion yen over the next three years in semiconductors, including 200 billion yen for "cell", which will initially use 300 millimetre wafers and 65-nanometre circuitry.

Analysts expect the chip to power Sony's next-generation game console, but the company aims to make "cell" the global standard for consumer electronics in the high-speed Internet era.

The next-ge neration microprocessor is being developed with Toshiba Corp and IBM.