Microsoft will upgrade the CPU used in its Xbox 360 games console early next year, the CPU's manufacturer announced today. 

The new CPU will be built using technology that can reduce heat and power consumption, as well as potentially increasing speed. It will also help Microsoft cut the console's cost.

The improved Xbox 360 CPU will be manufactured using 65 nanometre technology starting in the first quarter of 2007, Chartered Semiconductor of Singapore said. The existing CPU uses 90nm technology. 

Although the launch of the Xbox 360 last November was generally hailed as a success for Microsoft, the console has been troubled by reports of overheating causing games to crash or freeze.

These have come despite the unit using a pair of powerful fans, together with heat pipes, to carry heat away from the CPU core.

Microsoft acknowledged last year that it had received "isolated" reports of problems. One US buyer has initiated a class action suit against the company, alleging that both the CPU and power supply were prone to overheating.

As is common with advances in chip building methods, the 65nm technology that the new Xbox 360 CPU will use can provide lower power consumption and reduced heat output compared to older production methods.

While the new CPU may help Microsoft alleviate any overheating problems with the existing Xbox 360 design, it is standard industry practice for hardware makers to take advantage of newer semiconductor technology as it becomes available, simply because this helps them reduce manufacturing costs.