To compress industrial video content efficiently, H.266/Versatile Video Coding (VVC) introduces cross-component linear model (CCLM) prediction as a new coding tool, in which chroma components are predicted from the luma component based on a linear model. In this article, we propose a subset-based CCLM (S-CCLM), in which the model parameters are derived based on a subset of neighboring samples. To choose the most proper subset, we build the relationship between the prediction error and the geometric distance and resolve the optimal subset construction problem by minimizing the geometric distance. With the well-designed subset, a weight-guided parameter derivation algorithm is further proposed to improve the accuracy of the model parameters. The experimental results show that the proposed S-CCLM can achieve Bjontegaard delta bitrate (BD-rate) reductions of 0.14%, 0.64%, and 0.75% for the Y, Cb, and Cr components, respectively, when the number of samples in the subset, <inline-formula xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink"><tex-math notation="LaTeX">$N$</tex-math></inline-formula> , is 4 and BD-rate reductions of 0.22%, 0.80%, and 0.95% when <inline-formula xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink"><tex-math notation="LaTeX">$N$</tex-math></inline-formula> is 8. Given a small fixed <inline-formula xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink"><tex-math notation="LaTeX">$N$</tex-math></inline-formula> , fewer memory access operations are needed during the CCLM calculation, and a unified CCLM process can be achieved for coding blocks with different sizes and different modes. Due to its hardware-friendly architecture, the S-CCLM has been partially adopted by H.266/VVC.