Microsoft has signed a deal with Sony's PlayStation 3 manufacturer to build "around 500,000 Xbox 360 consoles a month", according a report by Digitimes.
Asustek-owned manufacturing firms Pegatron and Unihan have signed the deal with Microsoft in an agreement that will see the next-gen console built at bases in China.
Celestica and Flextronics are the current US-based manufacturers of the Xbox 360, but Microsoft recently blamed its American hardware sales defeat on 'supply constraints' and said it was actively looking for a new supplier.