This research paper presents the framework used to assess technological capabilities of technology-driven industries. The structure of the proposed framework is developed based on the concept introduced by Bell and Pavitt in 1995 whereas the areas and the levels of technological capabilities are specifically characterized in this research to match with the nature of technology-driven industries. A case example of Thai automotive electronics industry is presented to demonstrate how the framework is developed and used for assessing a firm๛s technological capabilities. Eleven sub-areas of technological capabilities are identified to cover the three main aspects: investment, production, and networking capability. A group of firms representing Tier 1, 2 and 3 as classified by Thailand Automotive Industry was selected for the interview. The assessment results of all selected firms are collectively analyzed to represent the level of technological capabilities of Thai automotive electronics industry. The results show that the technological capability in the area of research and development for supporting new product development is relatively low comparing to other capability areas; therefore, this area needs urgent corrective actions. The promotion of technology transfer between or among firms should be explored as one of the potential strategic options. For firms with an equivalent level of capabilities, the knowledge and technology can be directly exchanged. However, if the capability level of firms is largely unequal, direct exchange of technologies would not be effective due to the limited absorptive capability of lower capability firms. Thus, the mechanism of technology transfer using a mediator should be fully structured to solve this limitation. In addition, the study results show that the capacity level of firms also depends on the operational characteristics of each firm which are related to the nationality of firm owners. Moreover, the guideline suggestions for improving technological capabilities in all areas are also proposed in the paper based on the results of the analysis.