Semiconductor maker Atmel (NASDAQ:ATML) surprised everyone when it reported a fourth-quarter profit of $0.02 per share. The market had been expecting a modest loss.

Are you wondering, "What the heck is Atmel?" It's probably the biggest chip maker you've never heard of. Its products, such as custom logic chips and programmable memory, power everything from cars to cell phones, digital cameras, and personal digital assistants (PDAs).

Atmel's fourth-quarter operating loss was $10.7 million (including $27.6 million in asset impairment charges), but the company's net income was nearly $11 million, thanks to a $37.9 million legal award. Stripping out both the one-time charge and gain, Atmel produced just better than breakeven fourth-quarter results.

While that's an improvement over last year's losses of $0.03 per share for the quarter, investors should be more enthusiastic about fourth quarter's 25% revenue growth and the 11% sales increase for all of 2003.

The full-year loss of $0.25 per share is a whole lot better than 2002's $1.37 per share in red ink. Atmel looks like it has turned the corner, and it has rewarded investors who had the guts to buy in when things looked a little more grim.

Last year, Atmel was a favorite pick of Fools Mathew Emmert and Tom Jacobs. They expected it to benefit from smart restructuring, as well as the anticipated upturn in the semiconductor cycle. They were dead-on. The stock was under $2 last March, and has traded near $8 this month.

So, is there anything left for investors at this level? As with its famous chip-making brethren Advanced Micro Devices (NYSE:AMD), Intel (NASDAQ:INTC), and ARM Holdings (NASDAQ:ARMHY), the big money may already have been made. But Atmel projects sales growth of 23% to 30% for the upcoming fiscal year and increasing gross margins. It's been paying down its debt aggressively and sits atop a growing cash stash. (The latest numbers hint at free cash flow north of $100 million for the quarter.) If things continue like this, the stock may have plenty of room left to run.

Curious Fool Seth Jayson is considering taking apart his cars, cameras, and computers to hunt for Atmel's chips. Send re-assembly advice to FoolishSeth@sethj.com .