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Taiwan Semiconductor

(TSM)

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.

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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.