Analysis of the development strategy of late-entrants in Taiwan and Korea’s TFT-LCD industry

Abstract The strong and sustained growth performance over the last few decades of the emerging economies in Southeast Asia, including Korea and Taiwan, has stimulated an extensive literature. The ‘miracle’ explanation of economic growth in the Asian region is now discredited but the phenomenon remains the subject of several important economic debates in an extensive literature. These debates include the issue of whether there is a distinct Asian ‘model’ of growth, the extent to which their success marks the triumph of market-oriented solutions over government intervention and the sources of their competitiveness and productivity growth. This study examines the development strategy of late entrants in Taiwan and Korea’s TFT-LCD industry. It was suggested that Korea, under the full support of its government, tends to challenge the first mover in the TFT-LCD technology and compete with the frontier-Japan. On the other hand, Taiwan did not attempt to challenge the technology leadership in a confrontational manner, but focused on being a superior quick follower. In addition, the research paper also addresses the competitive strategies of both countries. The niche strategy for Korea can be attributed to global networking, production, investment, and innovation capability, while the niche strategy and the core competence of Taiwan’s TFT-LCD industry is mainly from system integration capability, quality, cost, and flexibility. The approaches of Taiwan and Korea may shed light on the strategies to be followed by developing countries when they seek to enter knowledge-intensive, high-technology sectors.