"Nvidia and ATI have already produced GPUs on a 55nm process, and we’d assumed that Nvidia would be moving its GeForce 200-series GPUs to the 55nm process early next year. However, if reports from Taiwan are true, both Nvidia and ATI could have plans for 40nm GPUs as early as the first quarter of 2009.

Taiwan Economic News reports that both Nvidia and AMD plan to contract Taiwan’s huge independent silicon fabrication firm, TSMC (Taiwan Semiconductor Manufacturing Company), to build the chips with the 40nm facilities it announced in March this year.

The site claims that ‘Nvidia plans to have its high-end GT216 chips made using 40-nm process next quarter,’ and that ATI has similar plans for its RV870 chip. AMD slides from CEATEC last month showed that AMD was planning a move to 40nm chips in 2009, as well as widespread use of GDDR5 memory, but this is the first news we’ve had about the chips being made at the beginning of the year.

With smaller transistors requiring less power, a 40nm high-end GPU could potentially enable Nvidia to compete with ATI’s Radeon HD 4870 X2 in the dual-GPU graphics card market again, although it would be interesting to see what ATI does with its 40nm GPUs too.

We’ve asked both AMD and Nvidia to clarify whether these reports are true, but in the meantime we’re going to put it down to rumour. It’s also worth noting that although the chips could be made in the first quarter of next year, it would still be a while after that before graphics cards were available to buy."