SEOUL (Reuters) – Shares of South Korean chip giants jumped on Thursday after U.S. chipmaker Micron Technology Inc forecast recovery in a memory market saddled with oversupply as device demand sags.

The world’s second-biggest memory chip maker, SK Hynix Inc, saw its shares surge nearly 7 percent by 0330 GMT, while technology giant Samsung Electronics Co Ltd gained 4.3 percent.

Micron said on Wednesday it saw recovery in the memory chip market, after reporting quarterly profit that beat analyst estimates as cost control helped offset falling demand and prices.

“Micron’s projection on growing memory chip demand from data centre operators set up a positive outlook for the memory chip industry, helping boost shares of South Korean chipmakers,” said analyst Seo Sang-young at Kiwoom Securities.

Analysts have been wary about prospects of the memory chip market due to lower demand for smartphones and slumping investment from data centre companies.

“With its plan to cut production, it seems that Micron is determined to better control oversupply problems in the chip market,” said analyst Park Sung-soon at BNK Securities.

Tech research firm TrendForce in a report on Wednesday said it expects a only a slight decline in NAND flash chip sales in the second quarter as demand recovers from smartphones, computers and servers.

“Although it won’t cause an immediate reversal of the oversupply situation, it will have a positive effect on the market environment,” analyst Ben Yeh at DRAMeXchange, a Trendforce division, said in the report.

Both Samsung Electronics and SK Hynix said in their earnings conference calls in January that they expected sales of memory products to revive in the second half of the year.

Rising chip shares helped lift the broader KOSPI stock price index by 0.3 percent.