The semiconductor  sell-off is overdone, creating a buying opportunity for value investors, according to one long-term market watcher and as reported by CNBC's "Trading Nation." Two chip stocks positioned to outperform include Micron Technology Inc. (MU) and NXP Semiconductors N.V. (NXPI). (See also: Intel’s Chip Lead Is ‘Disappearing’.)

Veteran tech investor Paul Meeks, the chief investment officer at Sloy, Dahl & Holst and the former manager of the $3 billion Merrill Lynch Global Technology fund in the '90s, spoke to the depressed state of the chip industry in an interview with CNBC on Friday. Shares of semiconductor manufacturers including Microchip Technology Inc. (MCHP), Applied Materials Inc. (AMAT) and NXP have all taken a beating in the recent period, dragging down the VanEck Vectors Semiconductor ETF (SMH), which tracks chip stocks, nearly 3% last week. 

"There's no question that near-term fundamentals are OK, and valuations are deeply oversold," said Meeks. This is significant within the technology sector, wherein "it's hard to find anything that's even fairly valued," he noted. The decline of SMH brought its price to earnings ratio below 14 times forward earnings, near a two-year low reached in April. For comparison, the XLK technology ETF trades at 17.6 times forward earnings, as noted by CNBC. 

Continuing Strength in PCs, Smartphones

While the general consensus on the Street is that the semiconductor companies, especially those involved in DRAM and NAND flash spaces, are going to continue to be pulled along with the strength of the PC market and the smartphone market, Meeks says that investors are overestimating down cycles in those markets and the effect it will have on semis.

"Although we may be entering a down cycle in some of these businesses, it is going to be more transitory and less steep than anticipated," he stated. Plus, high-growth markets such as artificial intelligence and big data analytics should partially offset the slowdown in PC and smartphones, added Meeks. Meanwhile, "you have some great bargains based on fundamentals that will rebound within three to six months," according to the tech investor. The Wall Street vet views NXP and Micron as cheap bets, expecting them to rise 30% to 50%. 

As for NXP, in which rival Qualcomm Inc. (QCOM) bid for at $127.50 per share in a deal that was stopped by Chinese regulators, it's roughly 30% decline since mid-June has created a prime buying opportunity. Micron, a leader in DRAM and NAND flash, should benefit thanks to its solid leadership position amid a consolidating industry, said Meeks. (See also: Micron Better Off Without Intel: Street.)