Businesses and consumers postponed spending on information technology during the financial crisis. The semiconductor industry, which provides the raw material for computing devices, took a huge hit from this frugality. But with a new technology replacement cycle underway, the semiconductor space offers some compelling values.

Computing devices have become ubiquitous, but semiconductors also appear in a wide range of products from kitchen appliances to cars and weapons systems. But investors must be selective when buying names in this highly commoditized industry. Stick with companies that have clear-cut competitive advantages.

Intel Corp (NSDQ: INTC), perhaps one of the best-known developers and manufacturers of semiconductor chips, fits the bill. As the world’s largest semiconductor outfit, the firm boasts a robust revenue base that supports extensive research and development (R&D)–a key to maintaining pole position within the industry.

The innovations produced by the firm’s R&D efforts include chips that combine computing and graphics processors onto a single chip. Intel’s new 22-nanometer chips have become the industry standard for next-generation processors and are 10 nanometers smaller than those currently in use. These smaller chips dramatically increase processing power and represent yet another coup for the firm.

With a current price-to-earnings (PE) ratio of just 9.6–Intel’s shares are also attractive from a valuation perspective–about half its historical average–Intel’s shares are also attractive from a valuation perspective. That’s largely a result of the pessimism that drove the industry’s PE ratio down by more than 40 percent from its prerecession high.

Investors in Intel are in good company. According to filings with the Securities and Exchange Commission, all but three key insiders have been net buyers of Intel shares over the past 12 months. Although that doesn’t mean that everything is going swimmingly, these moves suggest that few nasty surprises are in store.

Additionally, the company’s board of directors has had enough confidence in its earnings stream to boost its dividend six times over the past five years, pumping the dividend yield up to 3.4 percent.

That’s not to say that Intel doesn’t face any challenges. PC demand is slowing and the company hasn’t been particularly effective in adapting to the seismic shift toward smarter mobile devices. Still, the PC will be around for years to come and Intel’s track record of innovation suggests that it will become a stronger player in the mobile space.

Intel has moved quickly into other emerging technologies. The firm has been extremely active in the rapidly developing cloud computing segment. Intel’s data center and cloud operations account for about 22 percent of total revenue. That’s driven by a surge in Intel’s processor sales, with shipments to the top 20 cloud providers up 130 percent since 2008.

In fact, Intel has captured more than 90 percent of the processor market for servers and boosted its average selling price by 60 percent.