Check out what's making tech companies' profits crash

A measly 9% recovery is expected in 2013.

According to OCBC, Singapore-listed tech companies reported lacklustre results in general during the recently concluded 2QCY12 reporting season. Within its sector coverage, only MicroMechanics (MMH) exceeded our forecast; while Venture Corporation (VMS), ECS Holdings (ECS), Valuetronics Holdings (VHL) and Karin Technology (reports semiannually) all disappointed with their lowerthan-expected earnings.

Here's more from OCBC:

Out of the latter four companies, all with the exception of ECS reported revenue which matched our expectations, which highlights the margin pressures faced by tech companies. A bright spot during the quarter came from decent dividends declared by some tech companies.

For instance, MMH, Karin and Amtek Engineering’s full-year dividend yield stands at an attractive 7.5%, 8.4% and 7.5%, respectively, after adding their previously declared interim dividend to their final announced dividend. This is supported by their balance sheet strength and management’s commitment to reward shareholders with regular dividend payouts.

Previous expectations of a robust sequential recovery in the seasonally stronger 2H have dwindled in the past few months. This is attributed to continued uncertainties over the eurozone crisis and sluggish economic growth in US and China. The outlook we obtained from various companies were largely muted, given a heightened sense of caution amongst customers.

This has led to weak orders visibility, and exacerbated by rising cost pressures emanating from higher labour and utility expenses. Recovery is plagued by uncertainties Research firm IHS iSuppli also recently lowered its forecast for global chip sales from positive growth to a contraction of 0.1% in 2012.

However, a recovery of more than 9% is expected in 2013. We believe that industry conditions would remain challenging in the foreseeable future, although the expected launch of new programmes and products such as ultrabooks, Microsoft’s Windows 8 operating system (Oct) and Apple’s iPhone 5 and iPad ‘Mini’ (rumoured to be Sep/Oct) would help to buffer some of the near-term weakness, in our view.