A company owned by Abu Dhabi is to buy Singapore foundry Chartered Semiconductor for $1.8 billion.
That will put Advanced Technology Investment Co (ATIC) into the position of challenging other pure play foundries, such as Taiwanese company UMC.
Chartered, which is partly owned by the Singapore government is likely to be merged with Globalfoundries. Globalfoundries is a spin off from Advanced Micro Devices and has already picked up some foundry business.
The merged venture will be run by Doug Grose, who is already the CEO of Globalfoundries. Chartered at one time acted as a spill over foundry for AMD, when the X86 company was short on capacity.
Globalfoundries already has contracts to produce chips for AMD, and recently secured a design win with ST Microelectronics. Chartered has a number of contracts, including one to build semiconductors for the Microsoft Xbox 360.