How much does creating a new chip cost? If your guess was "a whole lot" then you're right; according to the NYT this week, Apple could have spent $1bn in developing the Apple A4 that powers the iPad, and that's not even counting the investment in building a factory, which can add another $3bn to the bill.
The Apple A4 is an ARM-based System-on-a-Chip (SoC) running at 1GHz, complete with an integrated GPU. In the iPad it's capable of outputting up to 576p video, though it's unclear whether that's a limitation of the iPad design or - perhaps less likely - the A4 SoC itself. However the NYT suggest that other ARM-based chipset companies, such as Texas Instruments and NVIDIA, are using the success of the iPhone to push their wares to other portable device manufacturers; it seems unlike that Apple will themselves be taking that route, as the A4 - and its successors - are expected to be saved solely for their own product lines.
[via Everything iPad]