Abstract: Small and medium-sized enterprises (SMEs) typically focus on niche areas within industrial chains. They possess the foundational expertise and potential to break through key core technologies in specific fields. However, they generally face constraints in innovation resources. Digital technology, as a new type of factor resource, can help SMEs overcome challenges such as limited R&D resources, insufficient technological collaboration, and restricted innovation search, thereby injecting new momentum into the accelerated breakthrough of key core technologies. Therefore, this study investigates the impact of digital technology on the breakthrough of key core technologies by SMEs and the relevant boundary conditions. The findings reveal that digital technology has a positive effect on the breakthrough of key core technologies by SMEs. However, this positive effect is moderated by firm characteristics. Specifically, the absorptive capacity and market momentum of a firm enhance the positive effect of digital technology, while the firm's size and strength weaken this effect. The conclusions of this study enrich the research on the antecedents and situational factors of key core technology breakthroughs by SMEs and provide practical insights for SMEs to leverage digital technology to accelerate key core technology innovation and, in turn, drive high-quality industrial development.