Abstract: When the industries in latecomer countries are transiting from catching-up to leadership, they may get into a dilemma on the access to acquire knowledge. Through the factor analysis and cluster analysis based on international and intra-national patent citations, this paper examines the evolving knowledge sources, in both overall innovative caliber and strategic innovative caliber, of the telecommunication equipment industry in China during its transition process. We find that the knowledge sources become complicated as the telecom industry are approaching the innovation frontier, such as the combinative use of knowledge form foreign technology and indigenous innovation. Furthermore, there are distinct kinds of knowledge sources in each dimension of innovation.