Earlier a Sony spokesperson denied a rumor that the new 40GB PS3 uses smaller 65nm chips. Now, in an interview on Japanese site Impress Watch, Sony Computer Entertainment head Kaz Hirai has clarified the rumor (and official denial): the 40GB PS3s do have 65nm Cell chips, but they also still have 90nm RSX graphics chips. (i.e., the 40GB PS3 has both 65nm and 90nm chips.) Hirai noted the smaller, more efficient Cell chip alone was enough for a considerable reduction in power consumption.
Hirai also commented that while both the backward-compatible 20GB and 60GB models are no longer in production, it is possible for Sony to produce them again depending on market reactions.
(Original source is in Japanese; for English, please read the 1UP or IGN report)