A report from Japanese website, Nikkan Kogyo, tranlsated via Gizmondo, has confirmed that Toshiba will begin mass production of the 45nm version of the Cell processor for Playstation 3 in 2009.

The cheaper production cost of the chip will be a God-send for Sony, who is currently experiencing heavy losses each time a Playstation 3 is sold.

The new chip will use approximately 40 percent less power and will be 34 percent smaller than the current 65nm version, meaning lower power consumption with reduced heat.

In theory, this means that Sony would no longer need the bulky PS3 chasssis and could release a slimline version of the console. Consumers, however, will no doubt be more interested to see a price cut, although with the current high costs of manufacturing the hardware, Sony may well decide to pocket the extra cash.

Source :: Gizmondo