The semiconductor sector has had its share of struggles this year amid a broader economic recovery. If analysts are correct, 2011 may be a better year for semiconductor exchange traded funds (ETFs).

Donald Schreiber, chief executive of Wealth Builders Inc., commented that the tech sector may be “one of the most exciting areas of 2011,” especially noting the growth potential for semiconductors, reports Jeff Benjamin for Investment News.

Schreiber points out that the semiconductor category is more than 40% below its “median normalized price-to-earnings ratio.” He also expects p/e ratios to increase as companies update and upgrade their hardware. [Semiconductor ETFs Hit Power.]

One company analysts seem particularly bullish on is Nvidia (NASDAQ: NVDA), a chipmaker that saw its stock sink 20% this year. The firm’s push into research and development may serve it well, says CNBC. [Semiconductor ETFs Hit the Refresh Button.]

If the economic recovery continues, we should see continued improvement in the semiconductor sector. Corporations are sitting on hoards of cash and one area they may be looking to deploy it first is in their IT departments, because not having the latest technology comes at a high price.

iShares PHLX SOX Semiconductor (NYSEArca: SOXX) is down 2.8% year-to-date, but SPDR S&P Semiconductor (NYSEArca: XSD) has fared better, up about 15.2%. Semiconductor HOLDRs (NYSEArca: SMH) may have benefited from its more narrow concentration in just 18 stocks; it’s up nearly 17% this year. [ETFs vs. HOLDRs: Which to Choose?]

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.