Weekly news roundup: South Korea takes physical AI push from policy to practice; Europe aggressively pursues non-red supply chains

South Korea’s shift from policy rhetoric to deploying physical AI marks a strategic acceleration in edge-intelligent hardware. This directly fuels demand for compute-in-memory chips, ultra-low-power sensors, and heterogeneous integration packaging, pressuring upstream material suppliers to fast-track high-thermal-conductivity substrates and novel dielectrics. Europe’s parallel push for 'non-red supply chains' extends the U.S.-China tech decoupling logic, compelling multinationals to build dual compliance frameworks—likely inflating operational costs by 15–20%. TSMC, Samsung, and Intel will intensify their battle over advanced packaging, especially in setting Chiplet interconnect standards. Within 18 months, smaller semiconductor firms lacking geopolitical hedging capacity will be squeezed out of premium segments, while those with modular design and localized manufacturing will dominate the emerging ecosystem. This policy-driven tech realignment signals the tipping point where global semiconductor value chains prioritize security over efficiency.