Semiconductors do a lot of things for us in our everyday lives. They are foundation of many modern electronics from iPads to iPods,  radios, cell phones and televisions. They also serve another purpose, as an indicator of the market. In a consumer driven economy, when times are good, people will purchase consumer electronics, which contain semiconductors. Companies that specialize in new technologies generally keep a highly adept statistician on retainer. That person, relying on current geographic, demographic and economic data, focuses entirely on forecasting product sales. Based on the statistics provided, the companies place order for chips long in advance of the final product, which is how semiconductors lead the market.

Right now, semiconductors are having a moment. Last year, the global semiconductor materials market grew by 25 percent compared to 2009. The semiconductor industry transported a number record units. As a result of the shipment increases, the materials industry reahced record revenues. Total semiconductor materials market revenues totaled US $43.55 billion globally in 2010 and they will likely continue to grow throughout 2011.

Already in February, bookings made a strong uptick, after a slight decline in January that had people wondering if 2011 would be the year semiconductors sunk. Instead, the bookings figure in February shot up to $1.59 billion, demonstrating month-to-month growth of 4.69% and year-over-year growth of 26.7%. This uptick in bookings portends positive movement for the semiconductor equipment industry.

Still, it’s important to note that the semi-conductor orders were made before the earthquake that shook the Japanese economy and will drastically affect spending. Japan is the largest consumer of semi-conductors and the latest disaster is thought to be the most expensive in history.

It can be expected that the Japanese earthquake will have an adverse impact on semiconductor equipment sales in the short term but there are a number of other areas that can make up for that and will likely result in a rebound for later in the year during holiday spending season. Current semiconductor stocks seem to reflect that optimistic attitude, continuing to climb today in trading.

This may be the result of the recent reports being released about the growth of smartphone industry in 2011. The global smartphone market is being forecast to expand by nearly 50 percent by the close of the year, which bodes tremendously well for semiconductor industry. According to the International Data Corporation, an excess of 450 million smartphones will be shipped in 2011 as compared with the 303.4 million units shipped in 2010.

This should help bolster semiconductors somewhat while Japan stabilizes.

In terms of investing in the market, there are a lot of options. Below are the five stocks in the Semiconductors industry boasting the highest Price To Last Quarter Annualized (LQA) Sales ratios according to data featured on SmarTrends. Determining the Price/LQA Sales can be used as a metric for comparing companies with similar market caps based on the most up-to-date available sales data on an annualized basis. To determine what company to invest in when faced with several options, its important to note that the lower the ratio, the more undervalued the company.

MoSys (NASDAQ: MOSY) has the highest with a Price to Last Quarter Annualized Sales of 15.69.

Ceva (NASDAQ: CEVA) is next with a Price to Last Quarter Annualized Sales of 13.93x.

EZchip Semiconductor (NASDAQ: EZCH) has the next highest with a Price to Last Quarter Annualized Sales of 13.70.

Cavium Networks (NASDAQ: CAVM) follows with a Price To Last Quarter Annualized Sales of 12.13x

Hittite Microwave (NASDAQ: HITT) closes the top five with a Price to Last Quarter Annualized Sales of 9.24.