Abstract Today, the manufacturing quality and replication skills of high-tech products or materials in China is continuously improving. And E.U., the largest economy entity in the world, is still the main market for both China & Taiwan to export the high-tech products. Therefore, it is a great concern for Taiwanese market share in E.U. if Taiwanese high-tech firms continue to invest in manufacturing in China. This study adopted fixed-effect model to analyze Taiwanese high-tech firms' investment in China vs. their market share in E.U. over the years of 2000~2008. The result showed that the investment of Taiwanese Electronic Units and Components Manufacturing in China has positive significant impact on its market share in E.U. and those of Taiwanese Electrical Equipment Manufacturing, Computers and Optical Products Manufacturing, Transport Equipment Manufacturing and Machinery Equipment Manufacturing in China has negative significant impact on their market share in E.U. due to the competition from China.