Patience is a virtue. Especially if you're investing in MIPS Technologies (Nasdaq: MIPS).

The designer of chip architectures was one of the worst semiconductor stocks to own in 2011. In 2012, the new year has started out slowly, but management expects to end the year on a strong note.

MIPS makes most of its business in the markets for home entertainment electronics and general networking. Both of those sectors are in a slump at the moment. Based on discussions with his customers, CEO Sandeep Vij thinks that the second half will be much better than the first.

If you paid any attention to the CES industry showcase earlier this month, that seems like a reasonable assumption. Smart TV sets were all the rage at that show, and MIPS would stand to benefit greatly if that trend hits the mainstream. Like every other technology segment, modern TVs are always getting both better and cheaper, and the crossover point where an upgraded set makes sense to most consumers can't be far away.

Of course, MIPS must beat back challenges from archrival ARM Holdings (Nasdaq: ARMH) and less-established home media player Intel (Nasdaq: INTC) in order to reap the rewards. If Intel can't make a dent in smartphones and tablets, perhaps consumer electronics could present an easier target for its Atom chips. To weather these storms, MIPS leans heavily on the Android platform.

Vij took every opportunity during Wednesday's earnings call to hammer home the fact that MIPS presented the first tablet running Android 4.0, codenamed Ice Cream Sandwich. He also highlighted a glowing endorsement from Android architect Andy Rubin, and pointed out that MIPS contributed a very significant chunk of new code to version 4.0.

That being said, MIPS has not done a great job of making money on its 20 years of technology research. Vij says that his portfolio of 580 high-quality patents is up for "strategic review," which could mean anything from patent sales to litigation crusades to perhaps selling the entire company. Whatever it takes to "maximize shareholder value," you know.

Keep a close eye on that project. The heyday of patent sales is over, and I'd much rather see the company seeking out better licensing terms with new and existing customers. In the just-completed second quarter, the revenue per licensed MIPS chip fell 4% to just $0.071 per unit. Compare that to ARM, which recently collected $86.8 million in royalties on 1.9 billion units sold for an average royalty rate of $0.46 per chip, and MIPS looks pretty strong. Still, there seems to be some room for improvement here.

MIPS didn't impress anybody in the second quarter, though the tide might turn shortly. Here at the Fool, our best analysts have found one stock with fantastic prospects in 2012 and no guesswork required. Learn all about it in our new special report: "The Motley Fool's Top Stock for 2012." It's only here for a limited time, and thousands have already requested access, so act now. The report is totally free.