This thesis presents the research of the diversification strategy for electronics test and measurement instrument industry. By investigating the diversification history and development of Agilent Technologies Inc and Chroma ATE Inc, this research compare their motivation, type, model and performance, and then derive the best diversification strategy. This research indicates that the diversification motivation of these two companies are mostly innovation and growth; the diversification type is related-diversification; as for the model, Agilent is more external-development while Chroma is more internal-development. The research shows that the diversification strategy provide the energy to company growth, the strategy should focus on the segment based on the core competence. The internal-development is a more reliable, lower risky model for diversification, the ultra goal of diversification should create shareholder value.