Advanced Technology Investment Co., a technology investment company wholly owned by the Abu Dhabi government, has finally agreed to buy Singapore's state-controlled Chartered Semiconductor Manufacturing, the third largest contract maker of semiconductors in the world, for $1.8bn.

The company plans to merge Chartered Semiconductor, the maker of chips used in Microsoft Corp.'s Xbox 360 game console, with Globalfoundries Inc., a joint venture between ATIC and AMD, to become one of the world's largest contract makers of semiconductors.

The deal is expected to close in Q4.