Despite limited research resources and little influence in the global market, Taiwan produces more than 40% of the world's supply of thin film transistor (TFT) liquid crystal displays (LCD), and in 2004 became the largest supplier. This study explores the competitive strategies of Taiwan's TFT-LCD industry, specifically the national system of innovation. The results suggest that, like the development of the semiconductor industry, Taiwan did not attempt to challenge the technology leaders but instead focused on being a superior quick follower. Implementation of this strategy can be attributed to four elements of the national system of innovation: government policy, human resources, capital investment, and a bridging institution. The author studies this unique strategy, the factors that support Taiwan's TFT-LCD industry, and suggests future challenges and directions for the industry.