This paper presents an overview of Taiwan's LCD (Liquid crystal display) industry to illustrate the emergence of competitive advantages of Taiwan's high-tech development. It shows that Taiwanese firms are evolving from manufacturing labour-intensive items of LCDs to more technology-intensive TFT LCD. The worldwide LCD demands are growing at a fast pace and Japan leads both in technology and economy of scale. South Korea is next to Japan in terms of market share and production scale, while the USA and European countries are trying to keep up with the world demands. A patent analysis was performed to analyze the technology trend and leading companies. Japan dominates the technology leadership and SHARP plays a key role of TFT technology development. The increase in labour wages cause Taiwan's industry to be less competitive in the labour-intensive products of TN-LCDs. However, supportive industrial policy, experienced engineers, well-developed IC infrastructures, ample sources of capital investment, and quick response to market needs, serve as the vehicle for Taiwan's competitiveness in the international arena of LCD industry.