A Taiwanese newspaper is reporting that the next-generation Kindle Fire tablet will be released on August 7. The China Times states that components for the device have begun shipping to Quanta, the world’s largest manufacturer of notebook computers. The newspaper is reporting that the next Kindle Fire will have a metal frame, and an updated, higher resolution display from LG.

There have already been rumors that Amazon will announce the device at an event on July 31. An August 7 release date fits well with that speculation. The China Times states that the first shipment of Kindle 2 tablets will be for 2 million units, and that Quanta has received an order for around 200 million total units. It also stated that 8.9-inch and 10-inch models are still a possibility from Amazon, but are not yet being manufactured.

This news sets the stage for some lively competition in the 7-inch tablet market. Though Google’s recently announced Nexus 7 tablet is better than the Kindle Fire in almost every way, the next Kindle Fire will almost certainly have the hardware to compete. And with Amazon’s content lead over Google (Amazon has a streaming video service a large ebook ecosystem), users may feel that the Kindle Fire 2 fits their content consumption needs better than the Google Play store can.

In addition, rumors of a smaller Apple iPad are looking more and more credible. A must-have iPad Mini and a 10-inch Kindle Fire would certainly throw the entire tablet market into a competitive disarray of mutually exclusive content ecosystems.