The article explores how complex technology affects manufacturers' innovation through vertical separation structure. The researchers found that the complexity of technology can either hinder or promote innovation in downstream manufacturers, depending on cost and market competition effects. The cost effect of complex technology can inhibit innovation, while the market competition effect can drive innovation. Different types of manufacturers are impacted differently by technological complexity, leading to variations in innovation outcomes. This study enhances our understanding of how upstream technology complexity influences downstream innovation in industrial chains.