(Reuters) - Chipmaker Micron Technology forecast third-quarter revenue above estimates on Wednesday, benefiting from the rapid adoption of artificial intelligence technology by businesses and an easing supply glut in the wider memory chip market.

The Boise, Idaho-based company's shares gained 13.4% in extended trading, after rising more than 60% in the last 12 months.

Micron reports results ahead of other chipmakers and is closely watched as the expected sales for its memory hardware act as an indicator of demand for various types of chips and end-markets.

Tech companies and other businesses have been vying to incorporate generative artificial intelligence into their products and services, driving demand for Micron's high bandwidth memory (HBM) chips that are used in the development of complex AI applications.

AI chip front-runner Nvidia will use Micron's latest HBM 3E chips in its next-generation H200 graphic processing units (GPUs). This gives Micron stronger footing against South Korean competitor SK Hynix, which was the sole supplier of HBM chips to Nvidia.

Analysts expect the company's share of the high-margin HBM market to grow throughout the year.

CEO Sanjay Mehrotra had said in December last year that inventory levels at data centers were improving and are expected to reach normal levels in the first half of the year.