2 Computer Chip Firms to Merge

Advanced Micro Devices Inc. and Monolithic Memories Inc. today announced plans for a merger that will create the world’s largest company devoted exclusively to the manufacture of computer chips.

Under the terms of the agreement, Santa Clara-based Monolithic would become a subsidiary of AMD, the nation’s fifth largest semiconductor manufacturer. The merged company said it expects to have annual sales of about $1 billion. The merger is expected to be completed this summer.