Tech Recovery Has Been Around for a While

For example, gross margins for the leading contract manufacturer, Flextronics(FLEX Quote), dropped from 5.3% to 5.2% in the September quarter, although revenue was up $400 million.

As has been the case throughout the tech slowdown, large manufacturers are squeezing their suppliers, demanding margin-trimming price concessions.

"Dell(DELL Quote) and Hewlett-Packard(HPQ Quote) are not relenting," Whitmore said.

A shift in product mix also may have contributed to the decline in margins for the company, he added.

As demand grows, though, suppliers will start holding out for higher prices.

As a case in point, EMC(EMC Quote), the large storage vendor, and McData(MCDTA Quote), a much smaller supplier of storage switches, have been at loggerheads over EMC's demand for end-of-quarter price cuts.

So far, McData's reluctance to yield to the larger company appears isolated, but there have been some indications that pricing for electronic components is stabilizing.