ATI WON'T BE making R500 chips for Microsoft's Xbox 360. ATI's job was to design those chips and to give the designs back to Microsoft to get them produced.

ATI would have had to help Microsoft with tape outs and with design tweaking, as those guys at ATI designed the R500 Xbox 360 GPU. But developers are now getting the "Real" hardware still based on G5 MACs but this time with real R500 graphic cards inside. This means that R500 chip is taped out and that it is working but we don’t know whether this is the final chip that Microsoft plans to ship at later date.

Microsoft plans to ship hundreds of thousands if not even millions of Xbox 360 consoles world wide from October, so it has to have at least that many R500 chips to power those consoles.

We heard few times that Microsoft will get both R500 and CPUs from IBM’s Fishkill factory in New York. We cannot confirm this at this date but it sounds very likely to us.

It’s interesting to note that ATI might work with the people who were not so successful in bringing Nvidia’s NV30 chip, as this chip was made at IBM’s Fishkill Fab. We should not blame IBM’s factory as it was Nvidia’s fault mostly - but still we find Microsoft's choice of Fab quite interesting.

We think the Vole knows what its doing as it really wants half of the console market. It has a nasty competitor called Sony and its Playstation 3 as you probably know by now.

We already wrote that Nvidia and Sony will get RSX GPUs from Sony's Nagasaki Fab2 facility as well as at OTSS.