This paper first focuses on the interaction and reinforce to each other of internal R&D and external knowledge in the process of technological competence evolution. Then the model of the two paths' circle action is put forward. In every phase of technological competence, the path of technological competence accumulation transforms from external knowledge assimilation to internal learning, these form three circles from external path to internal path. Finally, the paths of technological capability building of Hangzhou Oxygen-making Generator Manufacturer(HOGM) is studied.