The co-founder of chip giant Intel, (NASDAQ:INTC), Gordon Moore, theorized way back in 1965 that the number of semiconductors inside integrated circuits that amplify and switch electronic signals would double every two years, and this would in turn lead to faster, smaller, and more capable products. 

As it turns out, Moore's estimate was fairly accurate about those transistors; the actual doubling time has averaged around 18 months, in part because the industry bases its design and manufacturing processes around it. This has helped investors in tech companies such as Intel, Apple (NASDAQ:AAPL), and Skyworks Solutions (NASDAQ:SWKS) to profit over the years.

Can the good times continue?

The law of the land
Moore's Law, as it became to be known, is depicted below. Within microprocessor devices, transistor count grew from 2,300 in 1971 to about 2.6 billion in 2011. Expect 5 billion or more in the next generation of chips. 


Source: Google Images (ACM 97)

Smart revolution
Putting more semiconductors on board has made many of today's best-selling products possible. Remember the "brick" cell phones or refrigerator-sized computers of old? Today the same systems are but a fraction of that size, yet are far more powerful. The 32GB smartphone has 19,000 times the total memory available in the four main computers originally used on the Space Shuttle.

Fast and powerful integrated circuits, some built by Intel and Skyworks, allowed Apple to develop the iPhone in 2007. In the ensuing seven years, more than 400 million devices have been sold.

And based upon the rumors going around, and the fact that the high end of the market is still doing OK, many more are likely to be shipped going forward. The next-generation handset, the iPhone 6, is due out in the fall, probably having a larger screen and bigger-capacity battery, maybe as the result of Moore's Law. 

Apple might have a few other things up its sleeve, too. A smart watch, mobile payments platform, and some sort of improved TV system are reported to be in the works in Cupertino. The company probably needs one of them to be a hit in order to compliment its primary cash cow, the iPhone, and it's No. 2 product, the iPad, sales of which have begun to slow.

Eye to the sky 
Skyworks provides analog and RF chips to most smartphone makers, including Apple, and as long as the overall market continues to expand as projected it should keep doing well. 

Skyworks has averaged revenue and EPS gains of around 20% annually over the last five years. It has no debt and even pays a dividend. The company should be nimble enough at a market cap of $7 billion to keep up that robust pace, and it is not yet that pricey, having a relatively low P/E of 25. 

Investors should continue to do well with Skyworks.

Intel inside 
Getting back to Intel, the company made its name by providing microprocessors for the PC industry, but it has to adapt to changing times. With growth in the desktop and notebook world slowing, Intel needs to diversify into other markets.

Intel has not become a big player in mobile yet. Apple has had to procure its iPhone and iPad processors from its own arch-rival, Samsung Electronics. Reports last year indicated that the two Silicon Valley giants were discussing a possible deal involving Intel's Atom processor line. Will we see one in the iPhone 6 or the next iPad?

A saving grace for the Santa Clara-based Intel is that it provides the vast majority of microprocessors used in the server industry. The potential downside there is that if its superior position declines, the company and its investors could suffer. 

Foolish conclusion
As the "law" named after Intel co-founder Gordon Moore has projected, integrated circuits made by companies such as Skyworks and Intel have allowed device manufacturers such as Apple to create faster, smaller, and more capable products such as the iPhone.

Investors in Apple and Skyworks are likely to keep profiting as the number of transistors being placed inside components continues to go up. Intel shareholders should keep an eye out for any changes in the server and PC markets that could adversely affect the company. 

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Mark Morelli owns shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.