News Briefing According to a report by the South Korean media outlet Businesskorea, large Korean enterprises are withdrawing investments from mainland China in succession due to a combination of factors including inspections by the US government, changes in Chinese policies, and declining profitability in the local market. Impact analysis The origin of this news stems from Lotte Chemical's recent decision to fully divest from mainland China, including selling off its joint venture "Lotte Jiangshan Chemical" and all shares of its subsidiary "Lotte Chemical Jiaxing." While this event can be seen as the decision of a single enterprise in principle, on a macro level, Korean companies in recent years have been influenced by the overall environment. Due to poor management or strategic adjustments, they have repeatedly chosen to terminate their operations in mainland China. As Lotte is one of South Korea's top five enterprises, even theoretically competitive large enterprises with abundant resources find it challenging to operate. This is even more so for the numerous small and medium-sized enterprises. According to a survey published by research firm CEO Score in 2023, since 2016, Korean companies have sold or liquidated 46 subsidiaries in China. This process included subsidiaries of large conglomerates such as LG, Samsung, and Hyundai. The 78.1% year-on-year decrease in South Korea's direct investment in mainland China, as announced by the South Korean Ministry of Economy and Finance in 2023, directly confirms this phenomenon. Despite including economic downturn factors, it still indicates that overall South Korean companies are accelerating their withdrawal. In terms of supply relationships, including the Taiwanese PCB industry, the proportion of Taiwanese factories entering the Korean supply chain is relatively low. Theoretically, the withdrawal of Korean companies may not have a significant immediate impact on Taiwanese businesses in mainland China. However, when considering the trends of Japanese and American companies, there will inevitably be significant supply chain reorganization in the mainland China market. In the long term, besides the continuous increase in the proportion of mainland capital supply chains in the local market, the importance of managing relationships with mainland customers will also increase for Taiwanese businesses seeking to continue cultivating supply chains. However, given the current international situation, reversing this phenomenon is not easy. Over 60% of Taiwan's PCB industry is produced in mainland China.In response to long-term trend changes, preparations for diversifying production locations may be necessary.