ATI is expected to ready its graphics processor codenamed R500 by the first quarter of next year. Namely, this will be the GPU powering the Xbox 2 when it's released.

The R500 will be built using a 90nm process at Taiwan Semiconductor Manufacturing Company (TSMC) and will deliver performance similar to ATIís next-generation high-end graphics chip, the R520, the sources said.

DigiTimes also reports the R480 is due to launch before the end of this year. As we reported just yesterday, neither NVIDIA nor ATI seemed to have plans to upgrade to high-end graphics products this year, but with Radeon X800's 0.11u chip counterpart around the corner, they may be in position of releasing yet another higher clocked version of the X800.