As part of any successful company's strategy to reduce the cost of their product (in this case the admittedly expensive PS3), Sony's Ken Kutaragi has revealed
the not-surprising news that they're planning to reduce the system's Cell processor to a smaller, cheaper, and cooler 65nm manufacturing process in 2007. They're currently manufacturing the Cell using a more reliable 90nm process in both IBM's Fishkill and Sony's Nagasaki facilities.
their intentions to use a 65nm processor several months ago as well, as part of their long term plans to continuously reduce cost
(not price) of the console. It's unknown, but likely, that the PS3 will be met with similar concerns as the Xbox 360's overheating woes; a 65nm die shrink would ameliorate such concerns.