Abstract Driven by shifting external environments, the fastener industry in Taiwan, the renowned ¡§Kingdom of Bolts and Nuts¡¨, has to move to the production of high value-added fasteners. Auto fastener, which comprises 40% of all fasteners used globally, is just one of the major high value-added products. As auto parts are highly related to human safety with most strict quality requirement, auto fastener usually belongs to the high price product. Taiwan¡¦s fastener industry, avoid being attacked front and rear, has started to transfer production from standard fastener to auto fastener four or five years ago, but fallen short of a successful across-the-board transition. A few successful fastener producers on an adequate scale include SANSHING FASTECH Corp., CHU HUA Industrial Co., YING MING Industrial Co., BOLTUN Corp. and etc. The subject of this paper is to identify the problems confronted by the industry in transition, whether upgrading needs to tackle very high threshold or the post-transition will lose competitiveness so how. The paper is to study the competing strategies of auto fastener industry in Taiwan through in-depth interview with professionals, academics, entrepreneurs and employees of the industrial to collect their viewpoints and experiences. Assisted by current competition theories, the paper also survey secondary information and relevant papers to analyze the following topics: 1. Current development of the auto fastener industry in Taiwan and its competing strength and weakness. 2. The predicaments confronted by Taiwan¡¦s auto fastener industry while going through upgrading and key factors for success 3. A trio support from industry, government, and academic to assist the collective development of auto fastener industry. The findings of the paper: 1. Through further study of relevant data and theory paper, it is surprising to find that the competitive analysis of fastener industry in Taiwan fits in with the Diamond System and Clustering Theory of Michael E. Porter, and it is of wide application. Also, it is mentioned in the Diamond theory that the influence of role play between industry and vi government is reciprocal. It is difficult to judge which side has more influence on the other. Different time and environment will stimulate and exercise various functions and growths for both sides. 2. The fastener industry in Taiwan has developed well in to a geographical cluster with firm base for development, but it must go on with industry upgrading and producing high value-added products. Although auto fastener is not the sole choice, it leaves a great deal of space for growth. The members in the industry should assess their capability and core competitiveness to choose among auto fastener, speciality fastener, 3C electronic, aerospace fastener,and etc. for a transitional development. 3. There is ample room for the development of the auto fastener industry in Taiwan. The surface coating treatment, production process certification, and sales channel connection are three major topics to discuss. However, being the upstream raw material supplier and the largest interrelated industry, China Steel Corporation assumes the most important role in material supply, R&D, and vertical industry integration. Therefore, it is firmly believed that CSC possesses the capability to supplement and prosper the fastener industry in Taiwan Keyword: Auto Fastener, Competing Strategy, Diamond Theory .