Imagination Technologies was rumoured to be working with Sony on the PSP2 last November, when the company announced it had stuck a deal with a "major consumer electronics company".
The site claims to have information from insider sources stating that a quad core iteration of the low-power SGX543MP chip, codenamed Hydra, will be present in the next generation handheld, not to be confused with the forthcoming PSPgo.
The chip itself appears to be very close to the enhanced GPU experts say resides within the iPhone 3GS, providing a generational leap in performance over older PowerVR MBX processors found in the previous models.
The same technology is also found in select netbooks such as the Dell Mini 12, as part of the new low power Poulsbo chipset. The single core version of the chip has been demonstrated at CES running Quake 3 Arena at 30FPS.
The main difference is that the SGX543MP is a multicore processor, with anything up to 16 cores available. According to the original report, PSP2 opts for a quad configuration offering notional specs of 133 million polygons per second, and 4Gpixels/sec fillrate, assuming that Hydra operates at the chip's low-end of 200MHz (higher speed variants are also available, presumably for desktop use).
While specs like this are always subject to interpretation, these figures are a ballpark match for the original Xbox. However, PowerVR's tech includes tile-based deferred rendering, which should provide a performance boost.
Also of interest is the fact that Imagination Technologies itself describes the chip as a GP-GPU, meaning it has the ability to operate as both CPU and graphics processor in one, similar to projects being worked on by Intel and AMD. It may well be that PSP2 will centralise all of its processing into a single chip, thus saving power and providing other efficiency savings from a programming perspective (lightning fast interaction between game logic and graphics, for example).