Japanese companies have led the optical disk industry in technological development and commoditization. However, Taiwanese and Korean firms are quickly catching up and surpassing Japanese firms in terms of production. This paper focuses on the optical disk industry in Taiwan and considers the growth factors that have enabled Taiwanese firms to quickly catch up with their Japanese counterparts. The development of Taiwan’s optical disk industry is built on established prerequisites of cooperation with Japanese firms and international specialization. In other words, the relationship between firms in developed countries and those in developing countries that are rapidly gaining ground are based on not only competitive rivalry but also coexistence.