UPDATE 1-Abu Dhabi's ATIC eyes $2-3 bln tech spend

* Eyes larger share of global contract chip industry

* Stake in Global Foundries JV with AMD to rise to 70 pct

(Adds CEO quotes, background)

By Stanley Carvalho

ABU DHABI, March 8 (Reuters) - Abu Dhabi government-owned Advanced Technology Investment Company (ATIC) plans to spend $2 to $3 billion this year in capacity expansion as it eyes a larger share of the global contract chip industry.

Chief Executive Ibrahim Ajami told Reuters on Monday ATIC's stake in Global Foundries, a U.S.-headquartered semiconductor manufacturing company and joint venture with Advanced Micro Devices Inc (AMD) (AMD.N), would increase to 70 percent soon as part of its plans to take over the entire AMD stake in Global Foundries.

"ATIC's stake now is 68 percent. It will go up to 70 percent in two to three months," Ajami told Reuters by telephone, adding that ATIC plans to buy the rest stake through a capital call process over a period of three to four years.

"The intent is to make sure that Global Foundries is well capitalised and AMD is a buyable player," he said.

Global Foundries was set up in March 2009 as the world's first full service semi-conductor foundry when AMD spun off its manufacturing arm into a new firm with ATIC.

Silicon Valley-based Global Foundries has manufacturing operations in Germany, Singapore and a planned facility in New York.

ATIC, wholly owned by Mubadala, an Abu Dhabi government investment vehicle, filed an application in January with Germany's cartel office to buy AMD's stake.

The nearly $5 billion Saratoga, New York, plant will be ready in the first half of 2012 with initial capacity of 50,000 wafers per month, said Ajami.

The Dresden, Germany, plant's capacity is 30,000 wafers per month, and seen rising to 60,000 wafers a month by 2012.

"We will be doubling capacity in 24 months, spending $2-3 billion for expansion," he said, adding the firm has cash in its balance sheet, capital and borrowings from export credit agencies.

"We will continue to focus on our growth strategy in the next two to three years to position ourselves in the marketplace."

ATIC also fully owns Singapore's Chartered Semiconductor.

ATIC does not rule out further acquisitions but may not pick up foundries. "As an investment company, acquisitions are always in the pipeline but I am not interested in buying foundries and consolidating further and facing challenges of business integration," he said.

However, ATIC is eyeing the Korean market where it is exploring opportunities for joint investments, education and research, Ajami said.

"I am excited about the Korean market and next month we are visiting Korea to investigate further opportunities."

Despite 2009 being a tough year for the sector, ATIC is optimistic, he said, adding the semiconductor industry is growing at 15 percent year-on-year.

"We have ambitious targets, we are new and we are investing, so we will grow faster," Ajami said. (Editing by Thomas Atkins and Sharon Lindores)