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CHIPS Act: What's next for the bill after clearing a Senate hurdle

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Yahoo Finance’s Kevin Cirilli joins the Live show to discuss the road ahead for the CHIPS Act after the U.S. Senate advances the bill.

Video Transcript

BRAD SMITH: And on Tuesday, everyone, the Senate voted to advance the CHIPS Act, which aims to boost the US semiconductor manufacturing industry. Democrats hope to pass the legislation before August recess. And with more on this, we've got Yahoo Finance's contributor Kevin Cirilli. So Kevin, where do things stand on this right now?

KEVIN CIRILLI: We're anticipating a vote in the Senate later today. And then it would head to the House. And candidly, I'm expecting that there will be a vote in the House of Representatives sometime next week.

Now, President Biden, for his part, speaking yesterday with Commerce Secretary Gina Raimondo, saying that this is a national security imperative to advance this legislation which would provide $52 billion worth of investment in the semiconductor chip manufacturing space as well as additional financial investment across the country in various different tech, fab, center, foundry, manufacturing plants, and hubs, creating hubs in the United States in order to do this.

President Biden tweeting out, quote, "America invented the semiconductor. It's time to bring manufacturing and the jobs that come with it home."

And Senate Majority Leader Chuck Schumer, speaking yesterday on the Senate floor in support of the bill and saying that this would help to increase competition against the Chinese Communist Party. Take a listen.

CHUCK SCHMER: As a percentage of GDP, we spend less than half as much as the Chinese Communist Party on basic research, less than half, which is even more devastating, given China has spent decades stealing America's intellectual property. With this bill, that's finally going to change.

KEVIN CIRILLI: And I pulled some research on Yahoo+. And the Congressional Research Service says that in 2019, nearly 4/5 of global fab capacity was in Asia. Think about this, 28% coming from South Korea, Taiwan, 22%. Of course, TSMC located there. Japan, 16%, and China, 12%. The remaining 22% has been elsewhere.

Now, back in the 1960s, the United States produced about something like 40% of semiconductor chips in terms of global production. So a massive shift that has occurred over the last several decades. But no doubt, there's optimism, bipartisan optimism by the likes of Senator Todd Young, a Republican from Indiana, that this type of investment in critical high-tech manufacturing infrastructure would be able to provide a national security boost and also an economic one as well.

BRAD SMITH: All right, really excellent breakdown of where this all stands and what's coming next on this. Kevin Cirilli, thanks so much.