NEW YORK ( Karvy) -- Nova Measuring Instruments ( NVMI), Rudolph Technologies ( RTEC) and Nanometrics ( NANO) are three semiconductor stocks with potential upside based on strong company and industry outlooks.

Revenue growth for the chip industry is estimated at 4.6% for 2011, surpassing the $300 billion mark for the first time, says a report from Gartner. The research firm adds that the industry will grow annually at the rate of 31.5%.

During 2010, the top 10 original equipment manufacturers accounted for almost $104.3 billion, or one-third, of the total semiconductor vendors' worldwide chip revenue, reflecting a 33.7% year-over-year increase. Looking ahead, Gartner expects the growth rate to multiply as companies seek newer opportunities and as they foray into innovative product markets.

For future growth, Apple ( AAPL) plans to invest in the TV market through shipping new Internet protocol set-top boxes. Google ( GOOG) is seeking to extend its platform business to the TV market. Gartner believes that the TV service platform will be a key growth segment in the upcoming years.

During its fourth quarter, Intel ( INTC) announced plans to accelerate investment in production lines by almost $3 billion to a total of $9 billion, or 73% more than the investment made in the prior year. The announcement has apparently boosted suppliers of equipment and systems for Intel's fabs, or locations where wafers are processed.

However, not only will direct suppliers benefit from Intel's announcement but also all the suppliers in the semiconductor value chain.

Standard & Poor's, meanwhile, raised its recommendation for the semiconductor industry to positive from neutral and increased its growth rate forecast for 2011 to 14% from 3%.

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