What just happened? Commerce Secretary Gina Raimondo has warned of the potentially catastrophic consequences if the US is cut off from the Taiwanese chip manufacturing industry it relies on. Should the nightmare scenario ever become a reality, the US would face a "deep and immediate recession."

Following a Senate vote earlier this week where the $52 billion CHIPS bill advanced by 64-32, allowing it to move to the next stage, Raimondo talked to CNBC's Sara Eisen about the US' heavy reliance on Taiwan and companies such as TSMC for its semiconductors.

"If you allow yourself to think about a scenario where the United States no longer had access to the chips currently being made in Taiwan, it's a scary scenario," Raimondo said. "It's a deep and immediate recession. It's an inability to protect ourselves by making military equipment. We need to make this in America. We need a manufacturing base that produces these chips, at least enough of these chips, here on our shores because otherwise, we'll just be too dependent on other countries."

The Chips Act will offer $52 billion in subsidies to companies to help create new fabs in the US, unless said companies operate or plan to expand to unfriendly countries like China. Any firm that wants to use money from the $52 billion pool won't be allowed to make chips on a 28nm or smaller process node in the Asian nation.

Gina Raimondo

Around 90% of the world's cutting-edge chips come from TSMC, a statistic that has led to warnings about what would happen if China invaded the island using military force, a move the country previously said it wouldn't hesitate to make if it was deemed necessary.

"Taiwan is not a stable place," said Intel boss Pat Gelsinger late last year. "Beijing sent 27 warplanes to Taiwan's air defense identification zone this week. Does that make you feel more comfortable or less?"

Fears of what could happen if China ever did invade Taiwan intensified last month when Chen Wenling, chief economist at the government-run China Center for International Economic Exchanges, said that if the US and the West ever impose destructive sanctions on China like those placed on Russia, China must respond by recovering Taiwan and seizing TSMC.

While the CHIPS bill has advanced through the Senate, it still must pass both chambers. Intel is one of the Act's most vocal supporters, having recently announced it would be delaying the groundbreaking ceremony of its Ohio semiconductor factory and warned of more potential delays as a result of the bill stalling. GlobalFoundries gave a similar warning about the CHIPS Act delay slowing its plans.