Credit is tight and stock investors have rediscovered gravity. Now there's talk about a private equity bubble burst.

But buyouts still look sweet, according to a survey of 100 chief financial officers—they don't see a burst, they see buyout interest increasing over the next 12 months. Much of the action will be focused on the tech sector, long ignored by the buyout crowd as too risky, but seen as more attractive in the current market because it is not weighed down by debt. Not yet, anyway.

Three-quarters of the chief financial officers surveyed by executive search firm Tatum said they expect the number of companies seeking private equity to increase over the next year. The rest said they expect interest to remain the same. Nobody thought interest would flag, even in the wake of the subprime mortgage meltdown.

The biggest pending tech buyout, First Data Systems, is on track to close by the end of September, the company's chief executive insists. The $26 billion deal, fronted by Kohlberg, Kravis & Roberts, involves the world's largest credit card processor, a computer-intensive business.

Another pending deal, for telecommunications equiptment maker Avaya, is also likely to go through, at least judging from heavy stock purchases by company insiders; the stock was trading a buck and a half below the $17.50 offered in the $8.2 billion deal by private equity tech specialists Silver Lake and TPG Capital.

"Technology has entered the mainstream of private equity," TPG partner John Marren told Condé Nast Portfolio in a recent interview. The tech sector is especially ripe for buyouts now because its companies tend to carry so little debt, translating into lower debt-equity ratios in the final deal and, buyers hope, better credit terms.

Silicon Valley was built on venture capital and stock options. A corporate culture has evolved that turns up its nose at borrowing money, even though many established companies could increase returns on equity by reducing cash stockpiles and adding more debt. That includes Microsoft, Intel, Hewlett-Packard, and others. All could be candidates for private equity—if not for their huge market caps.

First, though, the private equity industry will have to prove itself with smaller deals. Private equity in tech hotspots like Silicon Valley has been a mostly local affair, with firms like Silver Lake and Francisco Partners leading the way.

But increasing interest from the big East Coast firms is no surprise. "It's the most important industry in the United States," says Sandy Robertson, Francisco Partners co-founder and éminence grise of Silicon Valley finance. "If you're not in it, you're not really in business."

The East Coast firms have occasionally stuck a toe into technology over the years, but the first serious move came in 2005 with the $11.3 billion purchase of software-services provider SunGard, by Blackstone, Bain, Goldman Sachs, and Silver Lake.

Late last year, KKR, Bain, and Silver Lake teamed up to buy 80 percent of Philips Electronics operations, renamed NXP, in a $4.3 billion deal, plus $5 billion in existing debt. In April, KKR agreed to buy First Data,

But the Blackstones and the KKRs—whose interests range widely, from auto-parts makers to women's undergarments to radio stations—have yet to show they've got the chops to enter the complicated world of high technology.

Aswatch Damodaran, a professor and tech-finance specialist at New York University, says he believes too much capital is forcing the traditional private equity firms into a market they don't understand. "If they continue in tech," he says, "it will be their Waterloo."

(Neither Blackstone nor KKR would comment about the substance of this article. A Blackstone spokesman explained: "We've been beat up by so many people, I don't think we want to talk to anybody.")

For a vivid look at the challenges, consider last December's $17.6 billion leveraged buyout of Freescale Semiconductor. A longtime division of Motorola, Freescale was spun off in a 2004 I.P.O. While Blackstone, Carlyle, and TPG were negotiating the buyout, Motorola and its then-hot Razr phone seemed to be riding high.

But just a few weeks after the deal was announced, Motorola's ugly underbelly came to the surface. The Razr was losing popularity faster than anyone thought, even as Motorola kept cutting its price. Revenues and margins both got whacked, investors waterboarded Motorola's stock, and some shareholders were calling for C.E.O. Ed Zander's head.

No one expects an easy fix, because Motorola has failed to produce a must-have successor to the Razr phone.

Motorola's problems infected Freescale, which supplies chips for the Razr and counted on Motorola for 27 percent of its revenue.

Critics of the buyout say it's a textbook example of how technology markets can flip-flop overnight. The buyout group "put a little too much faith in how much Motorola's market share would go up," says Ping Zhao, senior analysts at CreditSights, a debt research firm.

In the meantime, Motorola is diversifying its supply chain away from Freescale in favor of chips from Texas Instruments and Qualcomm. "The company won't go bankrupt," says Zhao. "But its business will not recover anytime soon."

First Data is another deal worth watching. It's considered a great company, but KKR paid an extremely high price for it—on average, buyout deals until late last year were priced at 8.6 times earnings before interest, depreciation, taxes, and amortization.

The Freescale deal was considered expensive at 11 times. KKR paid 15 times for First Data, an extraordinary premium, and with a debt load considered heavy even for a private equity buyout. Any hiccup in First Data's business could beat down KKRs expected returns in a hurry.

Freescale's problems may have helped push KKR to beef up its tech talent. In June, it hired two key senior advisers: Heinz-Joachim Neubürger, former chief financial officer at Siemens, and Richard Klemmer, recently chief executive at Lucent spinoff Agere Systems, a semiconductor company acquired in April by LSI Corp.

A couple months earlier, KKR had put partner Michael Marks, former boss at Flextronics, the giant international manufacturing contractor, on the board at Sun Microsystems. KKR earlier this year invested about $700 million in convertible bonds at Sun.

"People go on boards to gain influence" in Silicon Valley, says Terry Garnett of technology-focused private equity firm Garnett & Helfrich. "John Doerr was on the board at Sun for many years; Don Valentine on the board at Cisco."

If tech buyouts were easy, however, the debt-starved balance sheets would have attracted huge waves of buyouts a long time ago. Technology is a lot more complicated than, say, hotels or radio stations or women's hosiery.

Success or failure at Freescale, First Data, NXP Semiconductors, Avaya, and others will determine how far and fast private equity spreads through the tech sector.