Vishay Intertechnology, Inc. (VSH) | The Buildout — AI Infrastructure
The Verdict
Vishay Intertechnology manufactures discrete semiconductors and passive electronic components — MOSFETs, diodes, resistors, capacitors, and inductors. In the AI infrastructure buildout, its hybrid portfolio supplies a large share of the power bill-of-materials for data centers, supporting high-voltage DC power conversion, optical networking switches, and industrial electrification that feeds AI clusters.
| Market Cap | — |
| Revenue (TTM) | $3.2B |
| Revenue Growth | +9.9% |
| EBITDA Margin (TTM) | 9.6% |
| Net Debt | $622M |
| Earnings Beats | 1 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Book-to-bill above 1.3 for two consecutive quarters, with backlog at $1.9B covering 6.1 months of revenue.
- Gross margin trajectory ahead of plan: from 21.0% in Q1 2026 to guided 24.0% in Q3, achieving exit-rate target one quarter early.
- Revenue growth acceleration: Q2 adjusted revenue $919M, +21% YoY, and Q3 guide midpoint +21.4% YoY.
- Capacity investments on track: Newport fab gross-profit neutral, 12-inch fab equipment installation completion set for Q3 2026, foundry capacity for AI wafers ramping.
- Broad-based demand across end markets: industrial +30.1% YoY in Q2, automotive +10.1%, defense +15.4%, and record passives bookings.
What We’re Watching
- Double-ordering and safety-stock building acknowledged by management; customers ordering beyond 52 weeks could lead to demand air pocket (next several quarters).
- Full-year 2026 free cash flow still expected negative; capital intensity remains high despite Q2 turning slightly positive.
- Gross margin target of 30% remains distant and delayed from 2028 timeline; path relies on restructuring and 12-inch economics.
- Tariff and trade policy uncertainties, plus reliance on Asian foundries for AI wafers, add geopolitical risk (Q3 ramp dependent on Korea/China).
The thesis that Vishay 3.0 is unlocking growth and margin expansion is strengthening. Two consecutive beat-and-raise quarters, accelerating revenue, expanding margins, and concrete capacity milestones show the transformation is working. The open question is whether the order book reflects genuine end-demand or an inventory build that could reverse.
Earnings
Vishay reported adjusted revenue of $919 million for the June quarter, exceeding the top end of guidance and rising 21% year-over-year. Adjusted gross margin reached 22.6%, also above the guided range, as pricing actions flowed through and volumes grew 7% sequentially. Bookings remained strong with a company-wide book-to-bill of 1.32, supported by record passives orders.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $839M | $801M | $715M | +17.3% |
| Gross margin | 21.0% | 19.6% | 19.0% | +200bps |
| EBITDA | $80M | $72M | $55M | +47.1% |
| EPS | $0.05 | $0.01 | $-0.03 | −273.4% |
| Book-to-Bill | 1.32 | 1.34 | n/a | — |
Management tone: Management's tone shifted from cautious optimism at the start of the year to outright confidence, with deliberate messaging that Vishay 3.0 is working as designed and the company will not backslide to an allocation-driven model.
Management Guidance
For the September quarter, management guided to revenue of $945–975 million, representing 21.4% year-over-year growth at the midpoint. Gross margin is expected at 24.0% ± 50 basis points, achieving the year-end target one quarter early. SG&A is guided to $155 million ± $3 million, and the tax rate is expected to remain elevated at 35–40%.
Trajectory
Revenue bottomed at $715 million in Q1 2025, then rose gradually to $839 million in Q1 2026, a 17.3% increase from the prior year. Gross margin improved from 19.0% to 21.0% over the same period, as volume growth helped absorb fixed costs and initial pricing actions took hold. The order book strengthened with book-to-bill exceeding 1.0, signaling a demand inflection.
The Model
The model projects FY+1 revenue of $3,622 million and EBITDA of $398 million (11.0% margin). FY+2 revenue is projected at $4,200 million with EBITDA of $554 million (13.2% margin). Near-term projections are anchored by the current up-cycle and margin recovery, while the FY+2 forecast embeds the contribution from the 12-inch fab ramp and further operating leverage.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $3.1B | $3.6B | $4.2B |
| YoY Growth | — | +18.0% | +16.0% |
| EBITDA | $282M | $398M | $554M |
| EBITDA Margin | 9.2% | 11.0% | 13.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 5.2% above analyst consensus.
For the September quarter, management guided to revenue of $945–975 million, representing 21.4% year-over-year growth at the midpoint. Gross margin is expected at 24.0% ± 50 basis points, achieving the year-end target one quarter early. SG&A is guided to $155 million ± $3 million, and the tax rate is expected to remain elevated at 35–40%.
What Could Go Right — and Wrong
- Sustained industrial and AI electrification demand extends the up-cycle, keeping book-to-bill above 1.2 and backlog growing into 2027.
- Newport automotive approvals proceed monthly, lifting MOSFET utilization and margins, and freeing Itzehoe capacity.
- 12-inch fab starts production on schedule in mid-2027, delivering unit-cost reductions that accelerate the path to corporate margin targets.
- Pricing discipline holds even as supply tightness eases, with mix management steering capacity to higher-margin customers.
- Deployment of equity-raise proceeds funds a value-accretive acquisition that expands the technology portfolio.
- Demand air pocket develops if customer safety-stocking unwinds, causing book-to-bill to fall below 1.0 and backlog to contract sharply.
- Newport automotive approvals stall or the 12-inch fab encounters delays, limiting revenue growth and keeping fixed-cost absorption low.
- Tariff escalation or geopolitical disruption cuts off access to AI wafer capacity from Korean and Chinese foundries.
- Gross margin stalls in the mid-20s as cost pressures and mix shifts offset volume leverage, pushing the 30% target further out.
- Competitors with more advanced power-semiconductor technology capture the high-value parts of AI power designs, leaving Vishay with mostly lower-margin passive content.
Looking Ahead
In the coming year, Vishay faces a series of capacity milestones that will determine the pace and durability of margin expansion. Monthly automotive qualification approvals at Newport will unlock MOSFET capacity, while AI-related foundry wafer starts in Q3 add supply for high-demand products. The 12-inch fab moves from equipment installation to engineering wafers by year-end, with non-automotive production targeted for mid-2027. Meanwhile, the company is preparing a factory-footprint optimization restructuring expected to begin in 2027.
- Q3 2026AI foundry wafer ramp — Production release at SK Keyfoundry and two other Korean foundries adds AI MOSFET/diode capacity.
- Q3 2026Gross margin milestone — Q3 results test sustainability of 24% gross margin and revenue growth above 20%.
- Monthly through end‑2026Newport automotive approvals — Customer program PCN approvals unlock MOSFET utilization and free Itzehoe capacity.
- End 202612‑inch engineering wafers — First wafers at new Germany fab validate equipment and process ahead of production start.
- End 2026Polymer capacitor expansion — Capacity increase completed at existing sites and new La Laguna expansion started.
- Mid‑202712‑inch production start — Vishay’s first 12‑inch line begins production, improving MOSFET economics.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.9B | $3.1B | $3.2B | +4.5% |
| Gross Margin | 21.3% | 19.4% | 19.9% | 190bps |
| EBITDA | $216M | $282M | $4.8B | +30.2% |
| EBITDA Margin | 7.4% | 9.2% | 9.6% | +181bps |
| Net Income | −$31M | −$9M | $2M | +71.2% |
| Free Cash Flow | −$146M | −$89M | $871M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)19.9%
- EBITDA Margin (TTM)9.6%
- Net Margin (TTM)0.1%
- ROIC2.3%
- FCF Conversion-29.5%
- SBC / Revenue0.6%
The Company
Vishay Intertechnology is one of the world’s largest manufacturers of discrete semiconductors and passive electronic components. Its portfolio spans MOSFETs, diodes, optoelectronics, resistors, inductors, and capacitors, allowing it to serve the power-management needs of virtually every electronics end-market — industrial, automotive, aerospace, healthcare, telecom, computing, and consumer. In an AI data center, Vishay components sit in the power supply chain, not on the accelerator itself, supplying high-voltage DC conversion, optical network switches, and board-level power conditioning.
The company operates 48 manufacturing plants across the Americas, Europe, the Middle East, and Asia. It is executing a multi-year transformation called Vishay 3.0, investing over $900 million during a cyclical trough to build capacity ahead of demand. This includes a new 12-inch wafer fab in Germany, an 8-inch MOSFET and SiC fab in Newport, UK, and an expanding network of foundry partnerships. Distribution is its largest channel, accounting for 58% of revenue, and it maintains a broad base with no single customer exceeding 10% of sales.
Business Segments
Competitive Landscape
Vishay operates in a highly competitive landscape with numerous global rivals in each product category. Its key differentiator is a hybrid portfolio that spans both discrete semiconductors and passive components, enabling it to supply more than 80% of the bill-of-materials in a typical power application — a breadth few competitors match. Management also highlights growing customer preference for Western-based supply, which aligns with Vishay’s manufacturing presence in the Americas and Europe.
- NexperiaManagement confirmed gaining share in automotive, tied to site audits.
- InfineonNamed in filings as a key MOSFET competitor; no specific discussion in calls.
- ON SemiListed across multiple product segments; not addressed directly by management.
- STMicroListed in 10-K; no specific commentary in earnings calls.
- MurataNamed as a competitor in passive components; not discussed in calls.
Supply Chain
Vishay sits between raw-material suppliers and a broad base of electronics OEMs, with distribution accounting for 58% of sales. Its products are foundational building blocks for power and signal management across all end markets.
More on VSH: Earnings recap