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Micron Technology (MU) shares traded sharply higher Wednesday after the smartphone chipmaker topped analysts forecasts in its third-quarter earnings and said it sees a solid rebound in memory demand over the second half of the year. 

Micron said non-GAAP earnings for the three months ending in May, the company's fiscal third quarter, came in at $1.05 per share, down nearly two-thirds from the same period last year but still firmly ahead of the Street consensus forecast of 80 cents per share. Group revenues, as well, topped analysts' forecasts, coming in at $4.79 billion but falling 38.6% from the prior year period.

Looking into the current quarter, and the next fiscal year, Micron said it still expects to see "healthy year-over-year growth" in global DRAM semiconductor demand, but noted further capex cuts would be needed in order to generate a good supply-demand balance in current inventories. Micron also said it had started to ship some of its smartphone chips to Huawei Technologies, following the China-backed tech group's blacklisting by the U.S. government on May 15.

"We determined that we could lawfully resume shipping a subset of current products because they are not subject to Export Administration regulations and Entity List restrictions," CEO Sanjay Mehrotra told investors on a conference call late Tuesday.

"However, there is considerable ongoing uncertainty surrounding the Huawei situation, and we are unable to predict the volumes or time periods over which we will be able to ship products to Huawei," he added. "Micron will continue to comply with all government and legal requirements, just as we do in all our operations globally. Of course, we cannot predict whether additional government actions may further impact our ability to ship to Huawei."

Micron shares were marked 11.5% higher at the start of trading Wednesday to change hands at $36.43 each, a move that would extend the stock's year-to-date advance to around 15% and value the Boise, Idaho-based chipmaker at around $40.14 billion.

"We're lowering our estimates meaningfully, as the U.S.-China trade dispute has meaningfully lowered near-term demand and visibility, in our view," said KeyBanc Capital analyst Weston Twigg, who lowered his price target on the stock to $45 per share. "However, we continue to see very favorable long-term demand drivers, and we view the rapid response by memory producers to limit supply (especially in DRAM, which accounts for roughly 70% of MU's revenue) as a positive indication of rational behavior."