Although often overlooked in favor of ‘sexier’ tech stocks in the social media or cloud computing space, securities in the semiconductor industry can be compelling investments too. These companies often form the backbone of the technology world and are part of an industry that posted sales in excess of $333 billion in 2014.

Yet, besides the giant of Intel (INTC - Analyst Report) and a few others, few companies are household names in this space, despite the immense size and potential of the sector. Fortunately, we have found 3 under-the-radar stocks set to benefit from the increasingly innovative semiconductor industry, which is changing the electronic world before our eyes and is home to several ‘strong buy’ ranked stocks as well:  
 
Rudolph Technologies (RTEC)

Rudolph Technologies is an innovative leader involved in the designing, developing, manufacturing, and support of equipment and software for semiconductor, data storage, flat panel display, and more.  The statistics indicate that RTEC is a favorable candidate for beating estimates this quarter (Q1), as it has achieved an earnings beat in each of the three last quarters.

Your eyes didn’t fool you; RTEC has beaten our consensus EPS estimate by at least 200% each quarter in the last three quarters.  This stock has been upgraded in the last week, going from a Zacks Rank #2 (Buy) to a Zacks Rank #1 (Strong Buy). 

The stock has a nice PEG ratio of 1.23, indicating that its current price is more than justified.  Such a low PEG ratio also suggests that perhaps Rudolph Technologies is undervalued right now, as its growth is well in line with its current price. 

The current Zacks EPS consensus is up from $0.04 just a week ago for the current quarter to $0.08.  Doubling up on the earnings estimate consensus in such a short time is like sweet music to investors’ ears.  Rudolph Technologies reports its Q1 earnings on 4/27/15.

Tessera Technologies (TSRA)

Tessera Technologies is known for developing semiconductor packaging technology which meets the demand for miniaturization and exceptional performance of electronic products, like smart phones.  Stats suggest TSRA is set to perform well in the short term.

Tessera has been upgraded in the last week, going from a Zacks Rank #3 (Hold) to a Zacks Rank #1 (Strong Buy).  It also has a favorable PEG ratio of 0.99.  The year over year growth estimate is 356.25%, so growth expectations are high.  TSRA has beaten our consensus EPS estimate consecutively in each of the last three quarters. 

TSRA reported earnings after market close today, and is up about 3% in after hours trading thus far today.  The company posted a beat on our revenue consensus of $58 million, and actually posted total revenues of $59.9 million for the quarter.

Siliconware (SPIL)

Siliconware Precision Industries is engaged in semiconductor packaging as well as testing services.  These testing services focus on PCs, communications, as well as consumer integrated circuits markets.  These tests are done in order to protect semiconductor chips, maximizing efficiency and integration into electronic systems, as well as efficiency in dissipation of heat.

SPIL has been upgraded in the last week, going from a Zacks Rank #2 (Buy) to a Zacks Rank #1 (Strong Buy).  It has an exceedingly low PEG ratio of 0.6, suggesting that the company growth is outpacing the current price that the stock is trading for. 

As if that weren’t enough, the company also doles out a sizable dividend of about 2.6%.  Siliconware has beaten our consensus EPS of 0.11 last quarter and actually reported an EPS of 0.16 for the quarter.  SPIL reports its Q1 earnings on 4/29/15.