IDG News Service is reporting that NEC Electronics has won a contract to produce one of the chips that will make up the Xbox 360's graphics system. NEC is the second company to announce a contract for producing a piece of the graphics system of the next-generation Xbox; ATI Technologies announced back in August of 2003 that it was producing the graphics processor for the next-generation console.

According to NEC, its next-gen Xbox chip will be a large-scale integration chip that will function in tandem with the ATI GPU. The chip will include dynamic RAM and is to be manufactured in Yamagata, Japan.

NEC is the company behind the TurboGrafx game console from the early '90s. Last year the company sold off its remaining gaming interest, NEC Interchannel, which was known for its dating sims.