Xbox 360 Contains Pricey Samsung Chips

The day after researchers estimated that Microsoft may be losing money on the Xbox 360, Samsung announced it is providing the device's expensive graphics memory chips. Does Microsoft have a trick up its sleeve to make a profit? (

Samsung Electronics Co. announced Tuesday that it is providing the graphics memory chips being used in most of the first generation of Microsoft Corp.s new Xbox 360 video game consoles.

The chips are among an expensive list of components that some experts estimate to cost more than the devices themselves.

The Seoul, South Korea-based chip maker said that it is providing most of the graphics memory used in the initial run of the Xbox 360 devices, in the form of its 700MHz Samsung 512MB GDDR3 chips, but declined to provide specific numbers on how many of the components it has shipped to Microsoft.

Samsung provided the 128MB GDDR1 memory graphics chips that were used in the original Xbox, which is being replaced by the 360 machines, introduced last week.

While Microsoft representatives didnt immediately return calls seeking comment on whether or not Samsung would continue to provide graphics memory for the Xbox 360, officials at the Redmond, Wash.-based software giant said in a statement that they were "pleased that Samsung has been able to come through" with most of the chips needed to help facilitate Xbox 360s "aggressive ramp-up stage."

/zimages/2/28571.gifIBM pushes button on Xbox 360 chips. Click here to read more.

Samsung officials said the company provided the chips used in a "high-percentage" of the new consoles, of which Microsoft has shipped an undetermined number.

According to Samsung, the graphics memory chips can transmit data at 5.6GB per second per chip, approximately 3.5 times faster than the components used in the previous Xbox.

Built on the companys 90 nanometer fabrication technology using 300 millimeter wafers, Samsung claims that the chips give the Xbox 360 the ability to store eight times more graphics data than its predecessor, allowing for faster image and audio file processing.

Samsung executives said the company hopes to remain the primary provider of memory graphics for future production runs of the gaming consoles, built on the two companies experience working together on the first Xbox.

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