Google’s Nexus 7 is the tablet to beat at the moment and Amazon knows it. There have been long running rumors that Amazon is preparing to release a refresh of its Kindle Fire line and Amazon has an uphill battle if it wants to beat Google. With the launch of the Nexus 7, Google is using its brand name, technology, and its content (apps, games, music, movies) to woo users to its device.

According to the China Times, production of the Kindle Fire 2 has been ramped up and it is set to have 2 million units ready by August 7. Amazon is using an OEM manufacturer, Taiwanese hardware manufacturer Quanta Computer, also used by the likes of Sony and RIM. Other details revealed in the article are that the new Kindle Fire will use a metal chassis (with a plastic backing) and have a different battery supplier. This could indicate the use of a larger battery or it just could simply be a production decision based on supply and costs.

It is possible that Amazon will announce the Kindle Fire 2 on July 31st. Along with the new metal chassis, the next generation Kindle Fire is expected to have a better resolution IPS display (1280×600) and a front facing camera. To compete with the Nexus 7, Amazon will also need to boost the CPU power either by using a 1.5GHz dual-core CPU or by using a quad-core CPU (like the Nexus 7).