The semiconductor industry has had some halcyon years with the proliferation of smartphones, tablets, wearables and the explosion of the Internet of Things. Like all industries, there is always a point of critical mass where things either slow down or technology goes in a different direction.

A new and very in-depth research report from UBS makes the case that while end-demand is still solid for smartphones, data centers and automotive applications, industrial and PC demand is slowing. The analysts also point out that wearables and applications for the Internet of Things are too early in development to make a huge difference. While they do like some additional chip companies internationally, only four based in the United States are rated Buy. They are Intel Corp. (NASDAQ: INTC), Micron Technology Inc. (NASDAQ: MU), Nvidia Corp. (NASDAQ: NVDA) and SanDisk Corp. (NASDAQ: SNDK).

Intel

Intel recently introduced the company’s fifth generation processor. The chip giant’s commitment to smartphone and mobile applications, combined with the resurgence of PC growth last year, made it one of the best large cap value stocks to buy in 2014, and the same outlook can drive the stock this year. Intel trades at less than 15 times forward earnings, a very reasonable multiple for investors looking for growth.

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The UBS team points out that recent system-on-chip (SoC) development issues Intel has experienced were largely execution related and they believe, after some changes, that is behind the company. They also continue to see upside potential in the chip giant’s shares driven by the combination of a now-stable PC market, strong growth in DCG, improved profitability in mobile and a very large share repurchase plan

Intel shareholders are paid a very solid 2.8% dividend. UBS has a $41 price target on the stock, while the Thomson/First Call consensus price target is posted at $37.17. Intel closed Wednesday at $34.26 a share.

Micron Technology

This leader in DRAM chip sales is one of the top UBS chip memory picks. With a potential looming memory shortage, the stock could have serious upside potential. David Einhorn’s Greenlight Capital still holds more than 30 million shares of the stock after selling some in the late summer and fall. Most Wall Street analysts see strong growth for DRAM, especially from the in-memory and handset silos. The stock has backed off nicely from December highs and is offering investors a solid entry point.

While the UBS price target is $38, the consensus target is higher at $42.50. The share price at Wednesday’s close was $32.17.

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Nvidia

Nvidia supplies processing technology for the 3D graphics market, including desktop graphics processors and gaming consoles. Nvidia is also moving into visual computing chips for cars, mobile devices and supercomputers. Nvidia has a technology partnership with electric car maker Tesla, and posted very strong earnings last week.

The company has been able to use its ability to leverage past investments, with a more controlled spending structure ahead on unified, which enables strong cash flow that is allowing a focus on capital return, which is currently estimated to be $1 billion next year.

Investors receive a 1.5% dividend. The UBS price target is set at $22. The consensus price objective is $23.02, and Nvidia shares closed Wednesday at $22.12.

SanDisk

Quality, state-of-the-art solutions from SanDisk are at the heart of many of the world’s largest data centers and embedded in advanced smart phones, tablets and PCs. While some have speculated the slowing sales at Samsung are the reason for recent revenue revisions, many top Wall Street analysts think that the soft fourth-quarter earnings reports could be a one-off correction, and this give investors an excellent entry point for this top stock.

SanDisk investors are paid a 1.4% dividend. The UBS price target is $92, and the consensus target is slightly higher at $93.11. Shares closed trading on Wednesday at $81.94.

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While the UBS team is somewhat cautious on the chip outlook for the rest of 2015, they, like many others, are reasonably positive on the long-term prospects for the industry and the top companies. With that in mind, these stocks are still more appropriate for aggressive growth portfolios.

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