SAN FRANCISCO (MarketWatch) — With coffers still overflowing with cash, high-tech companies may look to step up deal-making and public offerings this year.

Reports from the earnings season so far indicate that cash continues to pile up on balance sheets in the tech sector. Heavyweights like Apple Inc. AAPL, +1.92% , Microsoft Corp. MSFT, +1.81% , Google Inc. GOOG, +0.76% and Intel Corp. INTC, +1.63% have amassed a combined war chest of more than $170 billion as of the end of December, which is expected to fuel more acquisitions and — in some cases — share buybacks and dividends.

Other deep-pocketed firms have yet to report. Cisco Systems Inc. CSCO, +1.08% will announce its latest results next week, with Hewlett-Packard Co. HPQ, +1.37% and Dell Inc. DELL, -1.17% expected in the later half of February.

Google vs. Apple in battle over apps

Some of these companies already have been active in undertaking mergers and acquisitions. H-P, Dell, International Business Machines Corp. IBM, +1.28% and software giant Oracle Corp. ORCL, +1.09% all dropped more than $1 billion in M&A last year. H-P alone did three deals in the $1 billion-plus range.

The number of such transactions in the United States among tech firms surged to 2,291 deals in 2010 — 37% above the number the year before, according to Dealogic. The dollar value represented by those deals shot up 35% to $92.8 billion.

“All of these companies are being very active in the market in terms of identifying good products,” said Aftab Jamil of BDO, a professional services firm.

Tech firms see merger deals as a way to plug a hole in their product lines or acquire a new capability without building something up from scratch. “It’s a matter of finding a fast solution to solving a problem,” according to Jamil.

In a study set to be released Tuesday, BDO surveyed chief financial officers of companies in the technology market. More than three-quarters of those surveyed said they expected to see an increase in mergers and acquisitions this year, as companies look to grow in a still-sluggish economy.

The expected increase in deal-making stems in part from the rising cash levels at tech companies, and in part from growing optimism about the economy. About the same number of CFOs predicted a gain in revenue in 2011 compared with last year.

A similar view was echoed in a report earlier this month by J.P. Morgan. Analyst Mark Moskowitz said large tech firms such as IBM, H-P and Oracle are being driven to become one-stop technology shops for corporate customers. IBM and H-P recently have executed buyout deals in the data-storage space to better fill out their offerings.

“We expect the shift to a more-integrated solutions stack to continue over the next few years, thus driving increasing deal activity,” Moskowitz wrote in a Jan. 14 report.

Calling 2010 a “warm-up” in terms of deal-making, he said activity this year is likely to be driven by the desire of large companies to build up assets in key markets, such as data storage and software. Potential targets include large software vendors such as Adobe Systems Inc. ADBE, +0.85% and Symantec Corp. SYMC, -1.35% , as well as large data-storage players such as EMC Corp. EMC, -2.53% and NetApp Inc. NTAP, +1.25% , according to the analyst.

Hiring to remain subdued

One area in which tech firms are not expected to put money to work is in hiring.

Jamil of BDO.said his firm’s survey of tech CFOs did not pick up any significant plans for expansion. Outside of deals, he said tech firms are likely to hold onto more cash to preserve liquidity in a market where access to capital remains tight for some.

“I think employment will remain a lagging indicator,” Jamil added. “We picked up no indication that CFOs were optimistic about increasing their payrolls to a significant extent.”

There will likely be some exceptions to this. Google announced recently that it intends to add more than 6,000 employees in the next year — its fastest pace of growth since 2000. Read more about Google's hiring plans.