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(INTC) - Get Report

has been taking hits this year between a $1.06 billion fine from the European Union and a stock price that's trailing the industry. But that might change as the chipmaker seizes the



The EU's fine, a penalty for engaging in anti-competitive practices, could cut Intel's earnings by 20% during the quarter it's exacted. The EU said Intel used illegal rebates to pay


makers to use its chips. It's a strange strategy considering it's clobbering the only other chipmaker,

Advanced Micro Devices

(AMD) - Get Report


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Intel has already established its dominance in


, small computers designed to surf the Web and do little else. Companies are expected to ship 35 million netbooks this year, according to ABI Research. That number is estimated to increase to 139 million by 2013.

Computer makers like


(HPQ) - Get Report



(DELL) - Get Report


ASUSTeK Computer

have been expanding their netbook lines, pitching them as a cheaper alternative to conventional computers. These devices rely almost exclusively on Intel's new power sipping Atom processor. As consumers shift from immobile desktops to laptops and netbooks, Intel's position will only improve.

A quick look at the online offerings of America's largest electronics retailer,

Best Buy

(BBY) - Get Report

, illustrates Intel's lead over AMD. Intel supplies the chips of nearly 70% of the desktop computers and 86% of the laptops Best Buy sells. All the netbooks listed on the site use Intel chips.

Over 30% of Intel's revenue comes from the consumer microprocessor unit. Its dominance in this business should help the company weather the slowdown in business spending better than most. If netbooks, which typically cost $200 to $400, take hold with frugal customers, the revenue stream will help protect the company from weak consumer spending.

Shares of Santa Clara, Calif.-based Intel have gained 13% this year, lagging behind the 18% advance of the S&P 500 Information Technology Index. It's a potential opportunity for investors trying to buy a stake in a tech industry leader. The company's price-to-earnings ratio of 29.2, makes it cheaper than the 32.1 ratio of the index.

AMD has been losing money for several quarters and has burned through all of the equity on its balance sheet. With Intel's only real competition in the consumer market quickly losing ground financially and in products, the future looks bright.

Intel is rated as a "hold" by TheStreet.com Ratings with a grade of C, compared with AMD's "sell" grade of D-minus. The ethically questionable actions by Intel are only a small negative when you consider the strength of the whole business.

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

Prior to joining TheStreet.com Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level II CFA candidate.