Citi says chip selloff tied to CXMT DRAM concerns is overdone

** Citi says it expects China's CXMT's 688825.SS planned 4F2 DRAM technology (a denser memory-chip design) to have a "limited" effect on global memory-chip supply

** Reported technological progress by CXMT has fueled concerns about increased competition from China's AI players on Tuesday, driving losses in global chip stocks

** The Philadelphia semiconductor index .SOX fell to its lowest in over 3 weeks and for a fifth straight session on Tuesday

** "CXMT is developing 4F2 on its legacy node 1y-nm (an older manufacturing process), with mass production unlikely before 2028," Citi says, adding that the Chinese chip maker remains four generations behind leading DRAM producers

** Citi says manufacturing costs for the technology may be about 10-20% higher

** The bank also cites CXMT's likely limited access to advanced EUV equipment (chipmaking lithography tools) as a hurdle to further scaling, while Samsung 005930.KS and SK Hynix 000660.KS are expected to use 4F2 on more advanced nodes

** US storage and memory stocks fall in premarket trading, with Micron Technology MU.O, Sandisk SNDK.O, Western Digital WDC.O and Seagate Technology STX.O falling between 1% and 2.3%