A semiconductor war might be likely in 2014 with chip giant Intel (INTC -1.79%) ready to do battle. The planned introduction of viable product over the next year could help it score some noticeable victories in the mobile space. While the company may not vanquish its foes, Intel shareholders could benefit from any good news produced during the clash. Here's why.

A steady performer with meaningful potential
Intel shares look to have little backing on Wall Street. Based upon the company's recent lackluster results, it's not surprising. Flat quarterly revenue year-over-year, a gross margin decline, and operating income dropping 9% weren't very inspiring. The chipmaker's 2014 forecast didn't evoke much optimism either. Revenue is expected to be unchanged, with profits under pressure as high margin PC-related chip sales fall. But, the market may be underestimating Intel's ability to deliver surprising gains in the mobile space.

The company is developing products that, for the first time, could give it an advantage over ARM-based chips that dominate the wireless industry today. A planned system-on-a-chip code named SoFIA, the first that puts an Intel processor and RF assets in a single package, is exciting. Besides a technical achievement, this advance shows the company is an improved competitor. By adapting a subsidiary chipset that originally housed an ARM product to use an Intel processor, and having third-party foundries produce initial runs, the chipmaker has reduced the product's time to market and cost in a way probably not thought possible a year ago.

Even more intriguing is the expected introduction of Intel's first 14-nanometer mobile device product in 2014. Smaller nanometer numbers generally indicate better chip performance via higher speeds and lower power consumption. If the company can get a lead in 14nm production, it could provide a noticeable advantage over the 20nm to 22nm chips on the market now.

Success on an Intel-compatible 64-bit version of Google's Android operating system would also be a boost. Currently, Android only runs on a 32-bit basis. By getting 64-bit going, Intel might not only push ahead of the competition, but also cut into Apple's tablet leadership. Apple, whose latest top-line iPad Air and iPad Mini already support 64-bit, claims its devices have improved performance helped by the bit difference.

While Intel's product line looks to have potential, little success seems to be priced into the company's shares. Based on trailing twelve-month revenue of $52.3 billion, the stock trades at a appealing 2.3 times, and on trailing operating cash flow of $19.0 billion, the market value is an inexpensive 6.2 times.

The sector leader is showing some vulnerability
While Intel may have possibilities, Qualcomm (QCOM -1.75%) is the reigning mobile chip leader, and that's not likely to change soon. Reporting blow-out results recently, quarterly revenue was up 33% year-over-year, with operating income jumping 20%. Yearly sales also rose 30%, and operating income increased 22% from the prior period. Clearly, the company isn't resting on its laurels.

Targeting growth in 4G-LTE use, Qualcomm has developed products like the recently introduced Gobi modem chipset and an upgraded Snapdragon mobile processor. The new Snapdragon is designed to deliver the industry's highest-quality mobile video experience while maintaining outstanding applications performance. The chipmaker hopes these innovative products will be able to take advantage of the upcoming 4G upgrade cycle in China. China Mobile, the nation's leading wireless carrier, has already chosen Snapdragon and Gobi-based LTE smartphones for its network.

While its new products are impressive, Qualcomm has also shown some vulnerability. A relatively weak fiscal 2014 forecast has troubled investors. Expected revenue growth of roughly 7.6% is noticeably lower than the company's past performance. Fears are that future growth, highly dependent on mobile device sales and pricing advancements, could be stymied as high-end smartphone markets become saturated and worldwide average phone prices decline.

Though the company may be facing headwinds, Qualcomm shares trade quite optimistically at around 5 times annual sales of $24.9 billion and 14.1 times operating cash flow of $8.8 billion.

A company undergoing a strategic refocus
NVIDIA (NVDA 0.76%), a smaller mobile chipmaker, seems to be going through a strategic shift. A longtime leader in GPU technology, which concentrates on computer graphics, the company hoped to expand into mobile processing with a product called Tegra. Changes in the way the company presented itself over the last year (via press release descriptions) suggest that it may be refocusing on GPUs and limiting mobile processing intentions.

While it's unclear whether the strategic change was a contributing factor in the company's recent uninspiring results, there's little doubt the latest quarter was disappointing. Total revenue dropped 12.5% year-over-year and Tegra processor business sales were down a whopping 54.4%.

A renewed focus on its strong GPU franchise seems a good move, and the company delivered some big wins recently. A collaboration combining NVIDIA GPUs with IBM enterprise software certainly is a victory. The venture is the first time that graphics accelerator technology will get into general enterprise-scale applications. The chipmaker also unveiled an impressive new product. The Tesla K40 is the world's first and highest-performing GPU accelerator optimized for growing big-data analytics and large-scale scientific workload markets.

With NVIDIA's gains in graphics offsetting letdowns in mobile processing, shares may be trading fairly at 2.2 times trailing 12-month sales of $4.1 billion and 10 times operating cash flow of $886 million.

Conclusion
A semiconductor war may be brewing. While Intel has admittedly been late to the mobile chip space, it finally appears ready to unleash some compelling product on competitors like Qualcomm and NVDIA. Since Intel shares seem to have little success priced in, investors may gain if the company can produce any good news during the upcoming clash.