Illustrating continued refinements in AMD’s 45nm process, the company has launched today a new spin of the Phenom II X4 965 with a lower TDP rating.

The new Phenom II is backed by the company’s brand new C3 stepping which reduces the TDP of the 3.4GHz chip from 140W to 125W. The reduction is primarily due to a reversal of the 0.05V voltage increase AMD needed to push the Deneb architecture to 3.4GHz when the 965 first launched; the new 125W X4 965s now run at just 1.35V.

The new C3 stepping also adds two notable improvements over the previous C2 stepping:

• Hardware C1E implemented for faster power state switches to preserve system performance (with BIOS update).
• Full support for four DDR3-1333 modules running at rated speeds (with BIOS update).

AMD also announced today the immediate availability of version 3.1 of the AMD OverDrive overclocking application. The new AOD release enhances overclocking capabilities with key (unspecified) processors, improves compatibility with CNQ, and offers a suite of bug fixes.

Buyers looking to nab one of the new 125W Phenom II X4 965 chips can find it under the HDZ965FBK4DGM SKU, while AMD OverDrive v3.1 can be downloaded from AMD when the site updates.