Companies with excess space will acquire smaller companies that have reached maximum capacity in order to fill their facilities and give the new company a fresh start to improve margins, he said.
"If you have a ton of state-of-the-art capacity available and you're a player like Infineon, you go out and you buy outdated manufacturing capacity like Atmel's," said Rolland. "You bring them in-house, give them an entirely new cost structure, cut management, cut the redundant sales force — and all of a sudden you pop that model and you pop margins."
Atmel is a maker of microcontrollers used in touch-screen interfaces on smartphones and other touch-screen devices.
Rolland's two other picks include Fairchild Semiconductor and ON Semiconductor, both power-management semiconductor companies.
—By CNBC's Leanne Miller