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It used to be a pretty simple equation. If you wanted to own a semiconductor stock you bought Intel Corp. (NASDAQ: INTC). Then you held it for years and made an excellent return. The days of betting solely on the processor giant winning from Moore’s Law ruling growth are long over. Personal computing growth has stalled, and the winners in the semiconductor sector are those that excel in chips for smartphones and tablets. The question is, who is winning that war?

Intel reported earnings last week and the market was not impressed. The processor and chip giant reported adjusted earnings $0.51 per share ($0.48 EPS net) and $13.5 billion in sales. Thomson Reuters had estimates of $0.45 per share and $13.53 billion in sales. For the coming quarter, Intel sees revenues of $12.7 billion, with its usual plus-or-minus $500 range on it. Thomson Reuters has the coming quarterly earnings report showing a consensus of about $12.9 billion in revenue.

Advanced Micro Devices (NYSE: AMD) reported today, and the analysts at Canaccord Genuity were not impressed. They reiterate a Hold rating on AMD following its in-line revenue result and soft top-line outlook. We expect weak PC demand and tough competition from Intel and Nvidia Corp. (NASDAQ: NVDA) to constrain stock appreciation as the company attempts to recover some of its lost GPU and MPU share.

ARM Holding PLC (NASDAQ: ARMH) recently collected three major downgrades in a week. This was after a 100% move up from last summer. One downgrade came from UBS A.G. (NYSE: UBS), where the rating went to Neutral from Buy. The firm cited peak multiples of earnings. In other words, it was a valuation downgrade. UBS actually did raise its target to 900p in the United Kingdom from 750p, but that implies less than 10% upside with an 840p price in London. UBS also raised earnings expectations based on higher royalties in the next four years, but a valuation peak call is what it is.

So as the semiconductor war continues to rage, who is the ultimate big winner? Samsung Electronics Co. surpassed Apple Inc. as the world’s biggest buyer of semiconductors last year because of demand for its smartphones and tablet computers, according to Gartner Inc. Samsung’s chip purchases surged 29% to $23.9 billion in 2012, the Stamford, Connecticut-based research company said in a statement today, citing its own estimates. Apple’s semiconductor spending rose 14% to $21.4 billion, it said.

One name that continues to top bulge bracket buy lists is Qualcomm Inc. (NASDAQ: QCOM). Qualcomm designs, develops, manufactures and markets digital telecommunications products and services. The very heart and soul of the smartphone. It trades today near $65.07, and the Thomson/First Call street consensus target is $74.50.

Investors may also want to look at Nvidia. The company provide graphics chips for use in smartphones, personal computers (PC), tablets and professional workstations markets worldwide. Trading today at $12.15, it has a street target of $15.

Companies that fail to participate in the smartphone and tablet revolution may be doomed. So make sure that any investment in this sector includes companies like the ones we mentioned that are participating and succeeding.