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Chips bill ‘is going to bring down costs, secure our national security,’ Sen. Kelly says

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Senator Mark Kelly (D-AZ) sits down with Yahoo Finance's Akiko Fujita to discuss the outlook for getting the chips bill passed and the importance of securing semiconductor supply chains.

Video Transcript

[MUSIC PLAYING]

AKIKO FUJITA: Samsung is reportedly eyeing a big expansion into Texas. The South Korean tech giant laid out plans to spend nearly $200 billion on 11 semiconductor plants in a series of filings. The first plant would begin operating in 2034, although the company-- if the company moves forward with construction. Although Samsung has stressed the plans have not been finalized, the group has already unveiled plans to spend $17 billion on an advanced facility in Texas.

Well, Samsung's plans come at a critical time. The Senate this week voted to advance a narrow CHIPS bill to encourage companies to boost production in the US. I spoke with Arizona Senator Mark Kelly on the timeline for the legislation and whether he expects President Biden to sign into law-- sign it into law before the August recess. Take a listen.

MARK KELLY: We'll get this done Monday, Tuesday, probably by Tuesday or Wednesday next week. And then it'll go to the House. That's a much simpler process. We'll get it to the president. We'll get it signed into law. But the best news about this is, this is so important for our national security.

Semiconductor chips go in all of our weapons systems, but everything from your cell phone to your vacuum cleaner, the price of semiconductors have gone up. And it affects the costs for so many things for Americans. So this is going to bring down costs, secure our national security. And we're not going to have to worry so much about the actions of an adversary, meaning China, when it comes to our supply of semiconductor chips.

AKIKO FUJITA: Let's talk about the specifics in this bill because I think there's still concerns about whether, in fact, there are enough strings attached to ensure that the $52 billion in incentives, for example, will be used for what it's intended for. The guardrails that are in place here specifically ensure that this money is being used for investments in the US, and not necessarily China or any other foreign country of concern. That's how it's worded. I mean, what exactly does that mean? How do you apply that?

MARK KELLY: It took a lot to get this across the finish line. But there are guardrails. I mean, you can't take this money and go build a fabrication facility in China. That's not going to happen. This is on US soil. This is going to bring tens of thousands of high tech manufacturing jobs back to our shores. And it's going to increase production in semiconductors dramatically. We used to be at 40% of worldwide production. Now we're at 12%. This is going to get us moving back in the right direction.

AKIKO FUJITA: There are those critics, like Senator Bernie Sanders, who've come out and said that this is nothing more than a government handout for companies who are quite lucrative and bring in billions of dollars in revenue. He specifically highlighted Intel, talking about how much revenue they made last year, but also how much CEO Pat Gelsinger makes in salary alone. What do you say to those who say that taxpayers should not be footing the bill for companies who can afford to build out in the US?

MARK KELLY: Well, securing our supply chain for semiconductors ultimately and allowing companies to have access to these and the number of ancillary companies that come in to support them just create, like I said, tens of thousands of high paying jobs. Those folks pay taxes. This grows our GDP. It is good for the bottom line. But it is also 100% necessary if we want to support our national security.

We can't have the best semiconductor chips that are required for our satellite systems and our advanced fighter jets and ships and other weapon systems made in another country, or by the way, tested in another country. A lot of chips are tested in China. I mean, think about that for a second. A chip will go through a Chinese company before it gets inserted in our military hardware? I mean, that doesn't make any sense. And this legislation addresses that.

AKIKO FUJITA: That was Arizona Senator Mark Kelly discussing the CHIPS Act, which, by the way, he has been a very leading advocate of. We should mention Arizona would be a big beneficiary on the back of this. They've already gotten deals with Intel, breaking ground on two fab facilities there, as well as Taiwan Semiconductor announcing their investment into a facility in Arizona.