Apple’s new iPad is an interesting device not so much because of what it offers to consumers—that’s certainly interesting in its own right—but because of how Apple built the device and why.

Apple has been scouring the market for seasoned semiconductor engineers of late. The process started two years ago when the company hired a team of former engineers from the late Digital Equipment Corp. who migrated first to PA-Semi, aka Palo Alto Semiconductor, and more recently to Apple. This is a rather odd trend, on the face of it, considering most companies have been outsourcing that part of their computer engineering. Apple had abandoned its own chip development efforts in its Mac line because Intel was beating the pants off everyone (which helps explain why Intel has run into so much scrutiny from regulatory agencies).

The folks at Apple haven’t gone entirely mad, however. The first details of its plan to develop its own chip began leaking out when a deal with a large Asian semiconductor company went sour. According to several sources, Apple’s initial iPhone deal called for this Asian company to provide the logic, memory and processor for the iPhone. But after a year of growing iPhone sales, this company also began shipping its own version of a smart phone that had some of the same feature sets as the iPhone.

Word on the street was Apple wasn’t happy. We have no idea what got broken or smashed in this fit of rage, but realize these folks are still reeling from the lawsuit with Microsoft that claimed theft of Apple’s graphical user interface in Windows 3.0. It doesn’t matter that Xerox invented this technology first. Apple brought it to market first, and it put Apple and Silicon Valley on the map. What took much longer was for Apple to establish itself as a brand that cut across business and consumer markets, which is where the iPhone came in.

Rather than risk a repeat performance with Microsoft, Apple began taking its chip development in-house again. It has been competing for engineers with well-known chipmakers in Silicon Valley, and it has been building in the kinds of things that it has been slammed for in the past, like lower power consumption and better utilization of cores.

But will competitive paranoia really drive a re-aggregation trend, or is Apple just so unusual that it will continue to carve its own path? These kinds of trends are best viewed in retrospect, and right now it’s still something happening in the future. The iPad isn’t on shelves yet and so far Apple is still using Intel chips in its Macs.

–Ed Sperling

For all intents and purposes, the downturn appears to be over. Like the California drought, it takes time to refill the reservoirs, but at least the economic base level is rising.

All of the leading indicators in the semiconductor market point upward and to the right. iSuppli reports that distributor inventories are below average, which is particularly interesting given that the electronics content of devices has been increasing steadily. It’s cheaper, after all, to design in an electronic component than to build a mechanical one, something that should become even more obvious once the automobile market begins rebounding.

That’s also evident in iSuppi’s prediction for the semiconductor equipment sector, which it expects to grow about 47% in 2010. Given the steady rise in foundry capacity utilization, that’s a strong indication of how the market is expected to play out over the next couple of years.

Overall market projections for growth on a global base seem to support this. The Economist’s economic indicators show all major economies are poised for GDP growth in 2010, with China leading the pack at 8.6% and the United States following at 2.8%. Both Europe and Japan will show slight growth, but at least it will be in positive territory. Equally important, inflation is predicted to stay well behind those numbers, as well, leading to a net positive growth across most of the world’s economic engines.

The big sticking point remains jobs. For highly skilled engineers jobs are still available, although in some cases actually taking a job may require relocation. In the case of a low-power engineer, that relocation may be to a place like Japan or Europe. In the case of an RTL engineer, it may be India or China. The recovery so far seems to have left many others stranded, waiting for companies to become comfortable enough with growth projections to begin the hiring process again.

The good news is that by this time next year it’s unlikely we’ll have time to reflect on just how nasty a global downturn can be. And that will be a very good thing, indeed.

–Ed Sperling

From the outside it looks like business as usual, but the race for board seats on the GSA has become particularly competitive this year.

GSA originally was created as an organization for fabless companies, but you wouldn’t know that looking at its membership roster. It has evolved into a who’s who of the entire semiconductor supply chain, including everyone from foundries like TSMC and UMC to semiconductor companies like IBM, STMicroelectronics and Samsung to EDA providers like Synopsys and Cadence.

Virtually anyone can become a member of the GSA, and given the list of members it appears that a good portion of the industry has signed on. But you have to get elected to the board of directors, which basically puts you into the center of the customer and supplier ecosystem. The proof is in the attendance numbers. Average attendance at board meetings of non-profit organizations is roughly 50%. The GSA’s attendance is closer to 100%, according to GSA president Jodi Shelton.

For two board seats in two categories there are 13 different executives in the running from as many companies. One is for the broadly defined semiconductor board seat, where 10 different companies are competing. The second is a new category of value chain producers (VCPs), where eSilicon, Global Unichip, and Silicon 360 are each vying for the spot.

While most of this happens behind the scenes—the lobbying for votes with recorded messages and the campaigning to members—what’s interesting is the hidden message behind all of this. The GSA is representative of the industry, and increasingly no company can stand on its own. An SoC isn’t the work of a single company—even at big companies like Intel, IBM or Samsung—which means it’s now increasingly important to be at the center of the ecosystem to remain competitive.

That makes the stakes higher than ever before, and it means GSA elections should become even more hotly contested at every process node—most likely with new spinouts like the VCP definition. And like all complex designs these days, this should get very interesting.

–Ed Sperling