Analog chip designer Intersil (Nasdaq: ISIL) had a rough day on the market yesterday. Its share price fell 14% after Intersil's fourth-quarter report left investors and analysts thoroughly unimpressed.

Sales in the quarter improved by 9% year over year to $194 million. Growth is growth, but that was an 11% decline from the previous quarter, and Intersil grew much faster than that throughout fiscal 2010. The coming quarter won't be much better as management predicts essentially flat sales quarter over quarter.

CEO Dave Bell blames an "ongoing inventory correction" among most of Intersil's end markets, though he believes the correction should end soon and return Intersil's sales to normal seasonal patterns. The computing market should rebound sharper than other segments.

If that prediction is correct, we'll see early signs of that rebound when computer systems builders Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ) report earnings in a relative lull near the end of the earnings season. But would Intersil be the best vehicle available to take advantage of that rebound?

Deutsche Bank saw Intersil as an excellent buy-in opportunity among semiconductor stocks when it was a much more expensive. The stock also fluctuates between a respectable four-star rating and a maxed-out five stars in our CAPS community, which speaks volumes about investor confidence in the company. If nothing else, Intersil is popular for its generous dividend payouts that leave even Texas Instruments (NYSE: TXN) and Intel (Nasdaq: INTC) looking miserly by comparison. And this small cap looks like buyout bait to some analysts.

In short, I can't blame you for seeing this sudden drop as a buy-in opportunity. Just keep an eye on Intersil's margins as the company struggles to become a high-end, high-margin chip provider. Adding the stock to your watchlist will help.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Intel is a Motley Fool Inside Value recommendation. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Texas Instruments. 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. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.