Summary

This paper investigates cluster formation and the development processes of new thin file transistor liquid crystal display (TFT‐LCD) clusters in East Asia. Despite the pivotal role of clusters in regional development and national competitiveness, there are only a few studies on how new East Asian high‐tech clusters have emerged and evolved and how these clusters are similar to and different from other clusters. Based on a comparative analysis of new TFT‐LCD clusters between Samsung in Asan‐Tangjung, South Korea, and Chimei in Tainan, Taiwan, we examine dynamic development processes and investigate how these rural areas have changed into high‐tech clusters in only a decade's time. Specifically, this paper explores the preconditions and initiation characteristics of TFT‐LCD clusters. It also compares some similarities and differences between two East Asian TFT‐LCD clusters and investigates the uniqueness of other global clusters. Therefore, this paper enhances our understanding of the dynamics of industrial clusters, adds a comparative perspective on cluster analysis, and suggests policy implications from the case study of cluster formation in South Korea and Taiwan.