According to Dean Takahashi, not only does the 65NM Falcon chip exist, but it’s already in China waiting to get shipped.

“When will that be? I don’t know how fast Microsoft can sell its boxes. The price cut will certainly help. But if people wait for the Falcon boxes, then that will slow the sales rate down. If you figure it will take some time to ramp up Falcon, get the chips into the boxes coming off the line, and ship the boxes from China (a six-week journey), then it will be some month before the Falcon machines arrive. It’s probably just in time for Christmas.”

Hopefully we end up seeing Falcon 360s sooner rather than later. If Microsoft actually got them out before Christmas, this would be one heck of a holiday.