The purpose of this paper is to investigate the diffusion of optoelectronic product in Taiwan by applying the discrete choice type diffusion models proposed by Gort and Konakayama (1982) and Gottinger (1987). Empirical results indicate that demonstration effect is the major determinant influencing the probability of entry. It is also found that Gottinger's expectation error model can be used to better explain the probability of exit. Wethen identify the different development stages of the optoelectronic products according to Gort and Klepper (1982) , and reestimate the empiricalmodel of Gottinger (1987) - It is shown that different development stages should be estimated separately for more stable and significant results.