As the main direction of a new round of industrial technology reform, the intelligent manufacturing industry has become an important trend in the transformation and development of China's manufacturing industry. It provides a new way for manufacturing industry in China to get rid of the low-end position in the global value chain distribution, enhance its competitive advantage, and realize the fundamental reversal from the low-end to the high-end. The continuous realization of intelligent process is inseparable from the innovation and diffusion of intelligent technology. Based on this, the moderated mediation model was constructed to study the sustainable mechanism of technological innovation diffusion on the intelligent transformation of manufacturing enterprises, and the specific path of technological innovation diffusion influencing the intelligent transformation of manufacturing enterprises was clarified, through the rise of value chains under the effect of competitive advantage. Using 257 valid samples of survey data to test the moderating effect model with mediation. The results show that: (1) Technological innovation diffusion has a significantly positive impact on the intelligent transformation of manufacturing enterprises; (2) The climbing of value chains can partially mediate the sustainable mechanism between technological innovation diffusion and intelligent transformation; (3) Competitive advantage plays a moderating role in the process of technological innovation diffusion, influencing value-chain climbing. With the continuous improvement of enterprise competitive advantage, the impact of technological innovation diffusion on the rise of the value chain gradually decreases; (4) The intermediary role of value chain climbing in the relationship between technological innovation diffusion and intelligent transformation was regulated by competitive advantage.