According to author Dean Takahashi’s unnamed sources, the chips are made by a German company named Infineon Technologies. Infineon has apparently had trouble manufacturing enough of the chips at the right speed, which has slowed the overall production process. In addition, an usually high fault rate on the memory chips has exacerbated the situation.
Takahashi’s report claimed that Infineon has been unable to produce enough GDDR3 (graphics double data rate) memory chips, which are also supplied by Samsung. Some of the Infineon chips are reported to run slower than the 700 MHz necessary, and these have had to be weeded out of the manufacturing process.
Microsoft has never specified the problem, blaming only “component shortages” for the delays. "We have more than 200 suppliers, and I'm not going to point the finger at any one of them," game division head Peter Moore is quoted as saying. In a speech at the recent DICE Summit in Las Vegas, Moore suggested that the Xbox 360 shortages would be over within four to six weeks.