Dubbed "Star Fox CD", the update will leverage the MSU-1 chip for CD-quality music, according to its developer, @RealSunlitSpace. It looks like this will be a separate project to @kandowontu's Star Fox EX, which was confirmed to be getting a Super FX 3 update in the future.
While CD music is the focus for now, @RealSunlitSpace says the long-term aim is to support Linden's Super FX 3 chip, which will also pave the way for force feedback via a special controller, also designed by Linden.