Micron Technology Inc.’s stock jumped more than 4% in extended trading today after company executives predicted the chipmaker had hit the bottom of a rough period during which its sales have declined for four successive quarters.

The maker of flash memory chips reported first-quarter earnings before certain costs such as stock compensation of 48 cents per share on revenue of $5.14 billion, down 35% from the year ago period. That was marginally better than Wall Street’s forecast of earnings of 47 cents per share on revenue of $5.04 billion.

Micron, like other chipmakers, has struggled this year amid a cyclical downturn in its main business, which has been hit by a serious oversupply. However, executives said they were expecting next year to be an altogether different story, with much stronger demand for its products.

“With our strong execution and improving industry conditions, we are optimistic that Micron’s fiscal second quarter will be the cyclical bottom for our financial performance,” Chief Executive Officer Sanjay Mehrotra said in a statement.

Micron specializes in two types of memory chip, namely Dynamic Random Access Memory, or DRAM, which is the most common type of memory used in personal computers and servers, and NAND, which is used in smaller devices such as USB drives and digital cameras.

In a conference call, Mehrotra explained that the company’s projections for next year are based on the assumption that there will be no perturbations to the demand environment because of macroeconomic conditions or trade-related developments.

“In DRAM, there has been a strong recovery in the second half of calendar 2019, and our view of calendar 2019 industry-bit demand growth has increased to approximately 20%,” Mehrotra said.

He added that the situation regarding NAND is also improving, and will continue to do so throughout 2020.

The executive had more good news for investors when he revealed the company had been granted all of the licenses it requested to supply products to China’s Huawei Technologies Co. Ltd., which is its largest customer.

The U.S. government caused problems for Micron and other chipmakers when it placed Huawei on a list of banned entities in May on security concerns. That decision means it’s illegal for U.S. firms to supply Huawei without a special license to do so.

“We applied for, and recently received all requested licenses that enable us to provide support for certain products… as well as qualify new products for Huawei’s mobile and server businesses,” Mehrotra said.

The licenses are not expected to have a material impact on the company’s revenue in the next couple of quarters, Micron said.

“Micron’s results reflect those of other industry memory and storage giants like Samsung,” said Patrick Moorhead, an analyst with Moor Insights & Strategy. “The industry has hit a trough, but just like it has over the last 30 years, it will bounce back up as supply declines. Micron needs to be focusing more on differentiating technologies like SCM, GDDR, and compute to take the edge off the troughs.”

Mehrotra discussed some of the company’s new technologies and its focus on “bespoke processors” that are customized for specific types of workloads in an interview on theCUBE, SiliconANGLE’s mobile livestreaming studio, during the Micron Insight conference in San Francisco in October:

For the second quarter, Micron said it’s expecting earnings of 35 cents per share on revenue of $4.65 billion. Wall Street had forecast earnings of 41 cents per share on sales of $4.82 billion.

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