Taiwan Semiconductor

(TSM) - Get Report

said earnings surged in its December quarter and predicted its blistering sector would do even better than previously believed in 2004.

The company said earnings shot up by a factor of six to $479 million in the quarter, or 12 cents per American depositary share, on a 37.5% rise in revenue compared with the year-ago period. Fourth-quarter revenue was up 5.3% from the third quarter, reflecting a 13.5% increase in semiconductor wafer shipments, a 5.5% decline in average selling prices and the weaker dollar.

Analysts were forecasting earnings of 11 cents an ADS on revenue of about $1.69 billion.

The company told an investor conference in Taiwan that it sees global semiconductor revenue rising 26% in 2004, up from a previous estimate of 20% growth. For its part, the company expects first-quarter "performance" that is "at least as good as that of the fourth quarter."

The company expects its wafer shipments to rise by a percentage in the low single digits, with average selling prices declining and overall utilization at about 100% "or higher." It predicted demand rising in the communications sector, staying the same in the consumer sector and declining seasonally in the computer sector.

TSM forecast 2004 capital expenditures of $2 billion, up from $1.2 billion last year.