Intel Corporation (NASDAQ: INTC), the huge microprocessor company, has held up pretty well in the most recent stock market correction. Despite a good drop in all the major stock indices, Intel budged little -- a sign all the sellers could be done dumping this stock.

From Intel's most recent quarterly conference call, what shocked me most was the growth in the demand for microprocessors. The presumption on Wall Street is with Advanced Micro Devices Inc (NASDAQ: AMD) doing an outstanding job coming up with new products the past few years and PC growth moderating considerably, it was hard to see how the chip giant would grow again.

However, the move to notebooks and the use of dual-core processors has created a big uptick in demand. While the per-unit pricing on dual-core processors is considerably less than the traditional single-core processor, the new fabs that Intel has constructed to manufacture these chips allows Intel to produce these chips for considerably less.

While this Fly has been cautious on semiconductors, with Intel apparently a washed out stock, with all the sellers gone, it is a good time to jump into the chip giant. I cannot remember the last time someone mentioned buying Intel's stock. This could be a good contrarian indicator.

My suggestion is to start buying Intel's stock and ride the seasonal up tick in demand.

We blogged late last fall about semiconductor stocks fundamentals rolling over. It appears semi management is beginning to whisper more and more of moderating results to analysts:

• Lehman cuts Micron Technology Inc's (NYSE: MU) estimates and sees losses for the next three quarters. The increase in demand for memory chips due to Microsoft Corporation's (NASDAQ: MSFT) Vista demanding more memory is not happening.
• Pacific Crest Securities wrote second quarter chip demand is underwhelming, with notebooks and the Nintendo (OTC: NTDOY) Wii the only bright spots.
• J.P. Morgan wrote consensus expectations for both the second quarter and all of 2007 are too high and is trimming estimates, The more significant earnings misses could come from Advanced Micro Devices Inc (NYSE: AMD), Cypress Semiconductor Corporation (NYSE: CY), Intel Corporation (NASDAQ: INTC) and On Semiconductor Corporation (NASDAQ: ONNN); with smaller cuts for Texas Instrments Inc (NYSE: TXN), Broadcom Corporation (NASDAQ: BRCM), Altera Corporation (NASDAQ: ALTR), Xilinx Inc (NASDAQ: XLNX) and Fairchild Semiconductor International (NYSE: FCS).

We began blogging about a slowdown in semiconductor stocks in November. However, most of this slowdown could be coming to an end. It appears from both National Semiconductor Corporation (NYSE: NSM) and Texas Instruments recent earnings releases that both companies are seeing the industry downturn ending as inventories have been worked down and backlog is beginning to build again.

The other major points we have been making is that we are entering the seasonally weak period for these stocks. So be cautious about jumping in with both feet in the early Spring.

Most likely, the two drivers for these stocks is the Fed lowering rates or the typically seasonal pick up which occurs in late summer. Since the Fed is on hold, there appears to be no need to jump into these stocks yet. Let the bad news hit these stocks and then start bottom fishing.