Let's now turn our attention to that hotbed of the American high-tech industry -- Maine. Specifically, let's all take a closer look at Fairchild Semiconductor (NYSE:FCS), a specialist in power semiconductors with a long, long history. Is this a fair-haired bet for semiconductor enthusiasts, or is the power fading here?

The company's third-quarter financials offer up both good and bad news. On the bad news front, sales were down 16% from last year's level, margins fell off notably, and a profit turned into a loss. Mitigating that is the fact that nobody really expected great performance, and most semiconductor companies' year-over-year comps don't look so good.

On a more positive note, revenue was basically flat on a sequential basis and margins, did improve on that same sequential comparison. Better yet, days of inventory on hand improved pretty significantly as management's efforts here have borne fruit. The company has also managed to stay free cash flow positive, principally by slashing capital expenditures.

As I mentioned earlier, Fairchild is principally in the business of power semiconductors. On the one hand, that's good, since just about anything that needs a chip needs power and power management. On the other hand, upwards of three-quarters of the company's business could readily be considered "commodity" -- high volume but low margin and sometimes easily replaced with competing products. And competition is certainly a factor here as large companies like Texas Instruments (NYSE:TXN), Analog Devices (NYSE:ADI), and Linear Technology (NASDAQ:LLTC) compete in some or all of the company's markets.

Fairchild is seeing strong demand right now from notebook makers and in end-user consumer markets like DVD players and high-definition TV's. Unfortunately, those are some of the exact markets that pundits have targeted as potentially vulnerable to slowdowns. What's more, other commodity-type chip companies have reported outlooks that could collectively be described as "mixed." Nevertheless, management exited the quarter with a book-to-bill above 1 and doesn't seem overly worried about end-user demand at this point.

It's tough for me to get too excited about any commodity company unless I'm finding a real bargain. Fairchild also has a couple of strikes against it: a historical reliance upon acquisitions to fuel growth and the impending departure of the CFO. The company's efforts to reduce inventory and move into higher-margin niches should encourage the fans it already has, but I'm not sure it will be enough to entice casual passersby.

For more chips off the old Foolish block:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).