Abstract: The research tries to learn more about the production strategy of Integrated Circuit (IC) assembling industry in Taiwan. The possible existing strategic groups based on the theories of strategic groups and industry characteristics in IC assembling manufactures will be discussed and figured out. And on the basis of the differences among the strategic groups, a structure model of strategic groups, production strategy and core competence can be built to analyze core competence and strategy types among different elements of strategic groups. At last the factor analysis shows the casual relationship among customer satisfaction and strategic group, production strategy and core competence, which then can provide manufacturers to build up the core competence and to develop the competition strategy and to enhance customer satisfaction. The result of the research is including (1) The selection of production strategies has significant impact on customer satisfaction (2) Core competence has great impact on customer satisfaction. “The competence of strategy and management”, “the competence of marketing and controlling, the competence of mass production and manufacturing and “the competence of research and development” in the core competence have significant impact on the improvement of customer satisfaction (3) The positioning of strategic groups has no obvious impact on customer satisfaction (4) The selection of production strategy has great impact on core competence (5) The positioning of strategic groups has enormous influence on core competence. And the four positioning of strategic groups and the four types of core competence have great impact as well (6) The selection of production strategy has significant impact on strategic groups.