(Bloomberg) -- Micron Technology Inc. gave an upbeat forecast for the current period, indicating that an industry glut is easing even as the chipmaker continues to face challenges in China.

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Sales will be as much as $4.1 billion in the fiscal fourth quarter, the company said in a statement Wednesday. That compares with an average analyst estimate of $3.87 billion.

“We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored,” Chief Executive Officer Sanjay Mehrotra said in the statement. But recent actions in China — where the government has decided that Micron’s products are a security risk — “is a significant headwind that is impacting our outlook and slowing our recovery,” he said.

Like many of its peers, Micron has suffered a collapse in orders for its products after sluggish demand for smartphones and personal computers led to a buildup of inventory. The company’s projection indicates that customers have worked through those stockpiles and are now returning to purchasing again.

The shares, which had already gained 34% this year, rose about 2% in extended trading. They had closed at $67.07 in New York.

Micron, the largest US maker of memory chips, is projecting a loss of about $1.12 to $1.26 a share in the current period, compared with an estimated $1.10 loss.

Micron’s chips, which help store and handle information, are particularly vulnerable to swings in demand because memory products are directly interchangeable and traded like commodities.

Rapid fluctuations in the balance between supply and demand can leave producers selling the components for less than they cost to make. Micron is also up against formidable rivals in South Korea: Samsung Electronics Co. and SK Hynix Inc.