Vishay Intertechnology

IThe business

Vishay Intertechnology makes the components that other companies solder onto circuit boards. It calls itself one of the world’s largest makers of discrete semiconductors and passive components, and it reports six product lines: MOSFETs, diodes and optoelectronics on the semiconductor side, and resistors, inductors and capacitors on the passive side.⁶ None of these is the headline chip. A MOSFET switches current on and off. A diode lets current go one way. A resistor, inductor or capacitor shapes the current around them. Every phone, car and server has a great many of them.

The company was founded in 1962 by Dr. Felix Zandman, whose Bulk Metal foil resistor was ultra-precise and ultra-stable, and it has grown by buying other component makers since 1985.⁶ It is incorporated in Delaware, runs from Malvern, Pennsylvania, and employs about 22,600 people, of whom 6,900 are in China, 2,300 in Germany, 2,100 in the United States, 2,000 in Israel and 1,900 in Taiwan.⁶ It runs its own plants, with subcontractors for some commodity products, and that is the first thing to understand. A plant is a cost that does not shrink when sales do.

Revenue in 2025 was $3.07B, up 4.5% after a 13.7% fall in 2024. Operating income was $57M. Then orders turned. Revenue in the first half of 2026 was $1.73B, up 16.9% on the year, and the company guides to $945M to $975M for the third quarter.⁶²³ I put 2026 at about $3.68B with my own estimate for the fourth quarter E (estimate).

What it sells, and where it makes money

The profits are uneven. Diodes, resistors, inductors and capacitors earn segment margins of 15% to 27% in good quarters. MOSFETs lost $31M in 2025 and earned 1.4% in the second quarter of 2026, its best margin in five quarters.⁶² Three quarters of 2025 revenue came from parts the company calls certified or custom, where a customer has qualified a specific part and will not change it lightly: commodity products were 26% of revenue, certified 48% and custom 26%.⁶ Only about a quarter of revenue comes from products launched in the past five years, so this is not a business that lives on novelty.⁶

Most of the cost sits outside the segments. The company spent $315M on selling and administration that it does not assign to a product line in 2025, $315M in 2024 and $320M in 2023.⁶ Over those same three years segment operating income fell from $806M to $372M.⁶ That is the useful fact for anyone judging the recovery. When sales rise, the fixed cost is already paid. In the second quarter of 2026 operating income was $53.5M, against $22.1M a year earlier, and the earlier figure included an $11.3M one-time gain.² Take that out, and add back the $30M of refunds passed through, and $156M of extra adjusted revenue brought $43M of extra operating income, an incremental margin near 27% C (calculated).²³

What the recovery looks like

Revenue has risen four quarters running, backlog went from $1.15B to $1.88B in three, and book-to-bill, the ratio of new orders to shipments, was 1.34 and 1.32 in the last two.² The company raised average selling prices 2.1% in the second quarter after cutting them in each of the three before. Gross margin rose from 19.5% to 23.3% in a year, and the third-quarter guide is 24.0%, give or take half a point.²³ The 10-Q says this is an improvement from most of 2025, when distributors were working off high channel inventories.² The company does not report how much of its sales go to artificial intelligence. Its annual report names A.I. once, in a list of demand drivers that also holds factory automation, electric cars, 5G and smart grids, and gives no figure.⁶

Who buys it

Distributors bought 55.9% of 2025 revenue, original equipment makers 37.4% and contract manufacturers 6.7%.⁶ By end market, automotive was 35.5%, industrial 34.7%, military and aerospace 10.2%, healthcare 5.0% and everything else, power supplies, telecom, consumer and computing, 14.7%.⁶ By where the customer sits, Asia was 42.2%, Europe 33.5% and the Americas 24.3%.⁶ The top 30 customers are 74% of revenue and none is above 10%.⁶ That is a spread I like. It has a cost: a distributor is a middleman who buys ahead when prices rise and stops when they fall, so the channel exaggerates both ways. The 10-Q names distribution customers among the sources of growth in MOSFETs, diodes, optoelectronics and resistors.² I cannot tell how much of the orders in the backlog is real demand and how much is a distributor filling shelves.

The plant is the business

Vishay spent $273M on plant in 2025, 8.9% of revenue, and $329M and $320M in the two years before, against 6.2% of revenue in 2016 to 2020 C (calculated).⁶ For 2026 it plans $400M to $440M, of which about half goes to a 12-inch wafer fab in Itzehoe, Germany, next to its existing 8-inch fab.² In 2024 it paid $177.5M for Nexperia’s 200mm wafer fab in Newport, Wales, to build silicon carbide power chips, and it expects the plant to start making a profit in 2026.⁶ The filings I read give no total cost for Itzehoe, and I cannot judge it. The company says these are long-term investments that were not expected to earn much in the near term.⁶ MOSFETs took $182M of 2025’s $273M of plant spending and made a loss.⁶ Depreciation and amortization was $225M in 2025.⁶

That is the second thing to keep in mind. The business earned little on its plant in 2024 and 2025, and the company has said more plant is coming. If it is built and filled, it can lift margins. If it is built and not filled, depreciation rises with nothing to pay for it.

The share price

Vishay’s stock closed at $11.82 on 20 November 2025, $18.41 on 1 April 2026 and $64.90 on 18 June, a gain of 3.5 times in under three months, then fell to $26.74.¹ I cannot give you a sourced reason for the rise or the fall. The company did not announce anything in the filings I read that explains the climb. On 22 and 30 October, when Vishay fell 9.5% and 9.1%, the Philadelphia Semiconductor Index fell 6.7% and 7.2% and Diodes fell 8.1% and 8.8%, so Vishay is trading with the whole group C (calculated).¹² A company that sold shares at $50 in June and trades at $26.74 in October looks to me like a stock trading on sentiment as much as on numbers, though I cannot prove it.

IIThe moat

A durable business keeps others from taking its profits. For a component maker the record shows whether it does. Over 2016 to 2025 Vishay’s operating margin averaged 10.6%, weighted by revenue, and ran from 0.2% in 2024 to 17.6% in 2022 C (calculated).⁹¹⁰¹¹⁶ Its gross margin averaged 25.8%, with a low of 19.4% in 2025 and a high of 30.3% in 2022 C (calculated). Peers that earn more show what protection looks like: in their latest reported quarters Texas Instruments had a 64.2% gross margin, Littelfuse 41.5%, onsemi 38.4% and Diodes 33.1%, against 23.3% at Vishay C (calculated).^5414152

The gap says Vishay sells more of what others also sell, or runs its plants less efficiently, or both. The kinder reading is that its recent margins sit on a trough. Vishay’s fixed cost is $315M a year of unallocated selling and administration plus $225M of depreciation, and revenue was 12% below the 2022 peak in 2025.⁶ The peers I compare have the same cycle. Diodes earned 20.4% in 2022 and 2.4% in 2025, and onsemi 28.3% and 1.4%, so the pattern is common to discrete chips and Vishay is not alone.¹⁶

Evidence it is widening

The first sign is price. The company raised average selling prices 2.1% in the second quarter after three quarters of cuts, and in Diodes, where 54% of revenue is commodity product, it rose 5.5% on the quarter.²⁶ A business with no protection does not get price in a recovery. The second is that qualified work is growing: inductors earned a segment margin of 24% to 27% in each of the last five quarters and capacitors reached 21.4%.² Third, the chief executive says demand is strengthening in all end markets, channels and regions and calls the company a new one, Vishay 3.0; I can see the first part in the orders and cannot test the second.³

Evidence it is narrowing

MOSFETs are the clearest case. The line sells against Infineon, Nexperia, onsemi, Renesas, STMicroelectronics and Toshiba, and the 10-K says some of its competitors are larger than Vishay.⁶ The segment earned $7M in 2024 and lost $31M in 2025.⁶ The 10-Q says average selling prices of established semiconductor products erode over time, and that specialty passives resist it better.² Second, the passive lines face scale at Murata, Yageo and TDK, which the 10-K names as rivals in all three.⁶ Third, Vishay’s selling and administrative cost has risen from $356M in 2016 to $538M in 2025, 51%, on revenue that rose 32% C (calculated).⁶⁹

My judgement: Vishay has a good position in several niches and an average one in the whole. It is not a business where the record supports a high premium on today’s margins. The test is the next downturn. If operating margin stays above 5% through it, the protection is larger than I assume. If it falls to 0% again, as in 2024, the price needs a different argument.

IIIThe competitive advantage

The table compares Vishay with four makers in the latest quarter each has reported. The quarters do not line up exactly: Diodes and onsemi had not reported September when I looked.

Vishay does not look cheap on this measure. Its market value is 19 times annualized operating income, against 28 for Diodes and 27 for onsemi, which earn more of each revenue dollar, and 16 for Littelfuse. The multiple is high because the profit is low: a quarter of 6% margin, annualized, is a business at the bottom of its range. The market is not paying for $53.5M a quarter. It is paying for what that becomes.

Where Vishay wins

Breadth is first. The 10-K says Vishay has one of the broadest lines of discrete semiconductors and passives among its competitors, and that its parts can fill more than 80% of the components on a board in many applications.⁶ Second is the order book. Backlog of $1.88B is 60% above a year earlier, and book-to-bill has been 1.20 or more for three quarters.² Third is cash. At 4 July the company held $1.30B of cash and short-term investments against $988M of debt, a net cash position of $315M on principal amounts, or $330M in the company’s own measure after deferred financing costs, where at the end of 2025 it had net debt of $436M.² It paid off a $238M revolver in the third quarter and has no principal due until 2028.² Fourth, it says it keeps significant plants in the regions where it sells, to shorten lead times.⁶

Where it loses

Margin first, as the table shows. Second is the fixed cost, which a slump exposes: the 2024 restructuring cost $40.6M and the company took a $66.5M goodwill charge that year.⁶ Third is MOSFETs, which takes the largest share of plant spending and earns the least.⁶ Fourth is distribution, 56% of sales, where inventory swings amplify the cycle.⁶ Fifth is China: 6,900 employees and $207.7M of plant sit there, and 42% of revenue goes to Asia.⁶ None of these positions is permanent. The first test of the new plant is whether the MOSFET segment reaches a 10% margin on $200M a quarter of sales.

IVManagement

Joel Smejkal has been president and chief executive since 1 January 2023. He was 59 at the end of 2025, joined Vishay in 1990 and ran its global distribution sales, its passive components business and corporate development before the top job.⁶ Marc Zandman, 64, the founder’s son, is executive chairman and chief business development officer and has run Vishay’s Israeli subsidiary since 1998.⁶ David McConnell is chief financial officer, Roy Shoshani runs the semiconductor plants and technology, Peter Henrici, 70, leads corporate development and Michael O’Sullivan is the chief administrative and legal officer.⁶ In January 2026 the audit committee dismissed Ernst & Young after the 2025 audit and chose Deloitte, with no disagreement reported.¹⁸

How they are paid, and what that pays them to do

Smejkal’s pay for 2025 was $10.34M, of which $1.03M was salary, $8.25M the grant-date value of shares, $1.03M a cash bonus and $29,000 other.⁷ In 2024 it was $5.45M and in 2023 $4.77M.⁷ The proxy statement reports a ratio of 559 to 1 between his pay and the median employee’s $18,480.⁷ The 2025 share grant was 208,333 restricted shares that vest over time and a target of 208,333 performance shares, which can pay from none to twice that number depending on how Vishay’s total return over the three years to 2027 compares with the S&P SmallCap 600.⁷ Salary for 2026 is $1.06M.¹⁹

The cash bonus is scored on adjusted EBITDA margin, adjusted gross margin and personal scorecards. For 2025 the adjusted EBITDA margin was 8.6% and the bonus paid out at 77% of target in a year when Vishay lost money and free cash flow was negative.⁷ The committee also adjusted gross margin for tariffs, currency and metals prices above budget, which moved it from 19.4% reported to 21.0% for pay.⁷ That is within its rights, and the proxy explains it. What it pays management to do is raise margin percentages and revenue. Neither measure counts the plant, so a year of heavy spending that lifts margins would score well even if the cash return were poor. The share grant does tie some of the pay to the stock against small companies, which is better, and over the five years to 2025 Vishay’s shares returned 77 for each 100 invested at the end of 2020, against 268 for the Philadelphia Semiconductor Index.⁷ In May 2026 holders approved six million more shares for the plan, about 3.9% of the shares now outstanding.²⁰

How much of their own money is in

Not much, and almost none from the open market. At the 2026 record date Smejkal owned 163,145 common shares, about $4.4M at the close, and Shoshani 48,813, and no director or officer other than the Zandmans owned 1%.⁷¹ The Forms 4 I read from June 2025 to October 2026 show two open-market trades. Director Michael Cody bought 3,500 shares at $16.12 in June 2025 and 250 more at $15.47, about $60,000 in all.²¹²² Director Raanan Zilberman sold 16,575 shares at $35.82 on 2 October 2026, $594,000 and about a third of what he held.²³ The sale came after the 60-day lock-up that directors and officers signed with the June share offering expired.²⁴ A director selling a third at a price 34% above today’s says little by itself, since directors are paid in stock. The rest of the Forms 4 are grants and shares withheld for tax. I found no purchase by an executive.

Who really controls it

The Zandman family does. Class B stock is 12.1M shares, 7.9% of the total, and carries ten votes each, so the family and related holders control 44.3% of the votes through Ruta Zandman, sole or shared, and 35.2% through Marc Zandman and Ziv Shoshani, a former director and a nephew of Ruta Zandman, who are co-trustees of the same family trust.⁷ The trust’s co-trustees must vote for one another as directors.⁷ BlackRock held 13.8% of the common stock at the record date, Woodline Partners 8.2% and Dimensional 6.2%, before the June offering.⁷ A holder with this control can protect the company from a hostile bid and from short-term pressure. It also means outside holders cannot remove management, and the family’s interest in a company it has held since 1962 is not always the same as that of someone who bought at $64.90.

What they did with capital over a full cycle

Over 2016 to 2025 Vishay earned $1.67B and generated $3.20B of operating cash. It spent $2.21B on plant, net of sales proceeds, which is 7.6% of revenue, took out stock pay of $0.10B, and was left with $0.89B of owner free cash flow C (calculated).^91011625 It paid $0.51B of dividends and bought back $0.29B of stock, which together took $0.79B, 89% of the cash it generated C (calculated). That left almost nothing for the plant program that followed, and in 2024 and 2025 the payouts came out of cash on hand and borrowing.

My view is simple. The financing is good and the plant is unproven. Management sold shares at $50, sold a convertible with a cap that shields holders up to $43.98, and stopped buying back stock when the price rose. The plant has the weaker record: it put $1.47B into spending in five years and earned almost nothing in the last two. The shares sold in June are worth $461M at today’s price against $863M raised before costs, so the company took $401M more than those shares are worth now. I count that as skill in selling and say nothing about what it will do with the money.

VFinancials

Ten years of Vishay contain a full cycle: two strong years in 2018 and 2022, a fall in 2019 and 2020, and then a slump from 2023 to 2025 that took operating margin from 14.3% to 0.2%. Revenue rose 12.2% in 2017, 16.7% in 2018 and 29.5% in 2021, then fell 13.7% in 2024 C (calculated).^91011625 One year says little. I use averages across the years, and where a year was restated I use the latest filing.

What an owner could really take out

Net income runs ahead of cash. In 2016 to 2025 Vishay reported $1.67B of net income and produced $3.20B of operating cash, but spent $2.21B on plant and paid its people $0.10B in stock that a pure cash view would not count. That leaves $0.89B, or 53 cents for each dollar of earnings C (calculated). In 2023 owner free cash flow was $0.02B, in 2024 −$0.16B and in 2025 −$0.11B, against net income of $0.32B, −$0.03B and −$0.01B.⁶ The best year of the ten was $0.23B, in 2021.

Two items inside that number need a note. First, stock pay: it was $22M in 2025 and $20M in the first half of 2026, up from $4M to $7M a year before 2023.⁶² I count it as a cash cost in my model, as I do on every page. Another $68M is still to be expensed on shares already granted, over about 1.9 years.² Second, tax. Vishay’s tax rate was 33.7% in the second quarter and 36.1% in the first half, and the company says it expects the rate to stay above the US statutory rate even at higher profits.² I use 28% for the model, the average of 2019 to 2023 when the business was healthy, and show the effect of 33% in Valuation E (estimate).¹⁰¹¹²⁵

What does it take to stand still? Depreciation and amortization ran $225M in 2025 and will be about $230M in 2026 E (estimate). Plant spending averaged 6.2% of revenue from 2016 to 2020, when revenue grew 1.9% a year C (calculated). I put the cost of keeping the plant at its current capability at 6.0% of revenue, $220M on this year’s sales and $330M at my 2036 base, and I count anything above it as growth spending E (estimate). That split is mine, and the company gives no figure for it. The nearest number is in the 10-K: at least 70% of the 2026 plan is for capacity expansion, which would leave at most $120M to $130M, about 3.4% of revenue, to stand still.⁶ I tested both and keep 6.0%, for three reasons. First, the 3.4% is what remains after a company label, not a cost. The same label left $49M in 2025, 1.6% of revenue, in a year when depreciation was $225M C (calculated).⁶ Second, the record: from 2016 to 2020, plant spending of 6.2% of revenue kept net plant at 0.32 to 0.38 times revenue, and it stood at 0.55 at the end of 2025 after the build-out C (calculated).⁶ Third, the end state. At 3.4% my 2036 plant spending is 0.90 times depreciation while the model still grows 3% a year for ever, and net plant falls to 0.30 times revenue. At 6.0% it is 1.12 times and 0.43. Holding 0.43 while growing 3% would take about 6.6% E (estimate), so 6.0% is not too high on that test. The table shows what each rate does. If the true figure were 4.5%, my base would be $21; at 3.4%, $23. I leave my values unchanged. On 2026’s plan of $400M to $440M, about $200M is growth E (estimate).² At the second-quarter run rate, operating income of $214M a year taxed at 28%, plus $230M of depreciation, less $420M of plant spending, leaves about −$36M before any working capital E (estimate). The first half did not pay for itself either: free cash was −$36.6M by the company’s own definition, and that was helped by tariff refunds and $15.5M of extra receivables sold.²

The balance sheet

At 4 July 2026 Vishay held $1.30B of cash and short-term investments against $988M of debt, $750M of convertible notes and $238M drawn on its revolving credit facility, for net cash of $315M.² The revolver was repaid in full in the third quarter from the share offering, so the position is about $1.06B of cash against $750M of notes.² The notes pay 2.25% and are due 15 September 2030. They convert at $30.16 a share, 24.9M shares if all were converted, and the company must pay the first $1,000 of each $1,000 in cash and may settle the rest in cash or shares.²²⁷ Holders could convert from 6 July to 3 October 2026 because the stock had closed above $39.21 on at least 20 of the 30 trading days to 30 June; by my count it did so on 28.²⁸²¹ By my count it did not close above that level on any of the 30 trading days to 30 September, so on the price test the notes would not be convertible in the fourth quarter, though I have seen no notice either way C (calculated).¹ At today’s price the notes are worth their face value, not more.

The revolving facility is $750M, matures on 8 May 2028 and carries covenants of at least 3.25 times interest coverage and no more than 3.25 times net leverage; Vishay was at 10.70 and 2.10 at 4 July, and had $423M of usable capacity.² Pensions and similar obligations were $166M, and it has accrued $80.8M of tax for bringing foreign earnings home.² I take those off the net cash, along with the $15M dividend paid on 24 September,²⁹ and count $0.05B outside the business, or $0.34 a share C (calculated). That is small, which is the point. The company says the $830M raised in June is for growth initiatives and general purposes, including repaying the revolver, so the cash is there to be spent. Of the $1.30B of cash, $805M was in the United States.²

VIValuation

First, how this goes badly wrong

Before any numbers, I asked what would most likely ruin this investment, and worked back. Three things can.

• The recovery is borrowed from the next downturn. Distributors bought 56% of 2025 revenue and the company says customers can often cancel or reschedule backlog without penalty.⁶ After the 2022 peak revenue slipped 3% in 2023 and fell 14% in 2024, and operating margin went from 14.3% in 2023 to 0.2% C (calculated).⁶ A second fall from a higher fixed-cost base, with $315M a year of unallocated cost and $230M of depreciation, would put margin back near zero within a year.
• The plant is built and not filled. Vishay spent $1.47B on plant in 2021 to 2025, plans $400M to $440M for 2026 and says half of it goes to a 12-inch fab whose cost it does not state.⁶² MOSFETs lost $31M in 2025 and earned 1.4% in the second quarter.⁶² If the new capacity sells at a price rivals set, depreciation rises and owner cash stays near zero, as it did in 2024 and 2025 C (calculated).
• The cash raised at $50 is spent badly. The June offering put $830M into a company whose pay is scored on margin and EBITDA, not on return on the money, and whose stated aim is to ‘accelerate growth initiatives’.²⁶⁷ The best defence is that Vishay sold shares at a good price. The risk is that cash on hand makes a poor acquisition or a third fab look easy.

None of these needs a surprise. They set my bear case and the reason I use a margin that cycles. Outside the model sit two more: a rise in tariffs, which the 10-Q calls uncertain in level and duration,² and a $750M cash call if the stock rises enough for holders to convert the 2030 notes, which requires a price above $30.16 and, for the notes to be open to conversion, closes above $39.21 on 20 of 30 days.²

What the price implies

At $26.74 the market values Vishay at $4.1B on 154.9M shares, 153.4M outstanding plus 1.6M for stock units already earned.¹²⁷² Book equity is $2.91B, so the price is 1.4 times book C (calculated).² It is 1.25 times revenue for the twelve months to 4 July, 31 times the mean 2026 earnings estimate of $0.85 and 15.7 times the mean for 2027 of $1.70, from six analysts, against my base of $1.83 of operating profit after tax per share for 2027 C (calculated).⁸ The share has fallen 59% from $64.90 on 18 June and is 1.9 times its price of $14.10 ten years ago C (calculated).¹ My number and the Street’s are close for 2027. The disagreement is in what the earnings are worth.

A growth rate from a recovering year means little, so I ask the question another way. My base cash from the second half of 2026 through 2029 is $0.34B, or 8% of today’s market value, discounted to $0.24B. Add what I count outside the business and the price has $3.85B left to pay for. That needs $0.45B of owner cash a year from 2030, growing 3% for good C (calculated). The best year in the last ten was $0.23B, in 2021, and the ten-year average $0.09B. So the price assumes Vishay becomes a company that produces about twice its best year, every year, and it asks for it before the new plant has been paid for.

Put in margin terms, the price needs operating margin to settle near 15% on my base revenue, against my 11.5% and the ten-year average of 10.6% C (calculated). Vishay reached 15% or more in 2018 and 2022 only, and 14.4% in 2021. Littelfuse earns 20% and Texas Instruments 47%, so the target is not absurd for the sector. It is high for this company.

What I can’t judge

I cannot tell you what Itzehoe will cost or earn. The filings do not state a total. I cannot say how much of the order book is end demand and how much is distributors filling shelves, how much of the 2026 gain comes from price, or what the third quarter showed, because results come out on 4 November, after my price date. I cannot see what the company will do with $1.06B of cash. And the June to October swing in the share price, from $64.90 to $26.74, has no cause I can source. Here is the range, and read my $19 with it in mind.

The discount rate

I use 11.5%. The capital asset pricing model starts with the 4.94% ten-year Treasury yield at the Q4 2026 close and Damodaran’s 4.20% implied equity risk premium of 1 October.³⁰³¹ My ten-year beta for Vishay against the S&P 500, on month-end returns, is 1.61, which gives 11.7%. The five-year beta of 1.88 gives 12.8%, and the three-year 2.76 gives 16.5% and is mostly 2026’s run C (calculated).¹³² I take 11.5%, a beta of about 1.56. Vishay now has more cash than debt and sells three quarters of its output as certified or custom parts, which argues for a lower rate, but its margin has swung from 0.2% to 17.6% and it carries $315M a year of unallocated cost, which argues for a higher one. I sit above the 11.0% on my STMicroelectronics page because Vishay’s record is thinner, and below the 12.0% on my Micron page. A point more takes the base to about $16.4, and at 9.5% it is about $25.2, still below the price.

Three cases

I keep the model simple. For each year I set revenue, operating margin, which is after stock pay, and growth spending on plant. Plant spending is 6.0% of revenue to stand still plus the growth amount. Depreciation is 12.5% of opening net plant. Tax is 28%. Working capital is 25% of added revenue; at 4 July receivables, inventory and payables came to 27% of annualized sales.² The second half of 2026 uses the third-quarter guide of $960M at a 24.0% gross margin and my estimate of $995M and 24.5% for the fourth, with selling and administration of $158M and $160M.³ Each year’s cash arrives at year end. Net cash and other items outside the business are $0.05B. Per-share values divide by 154.9M shares. The 2030 notes are debt of $750M; they add shares only above the $43.98 cap of the capped call, which none of my cases reaches.⁶²

The base is generous on one point and cautious on another. Generous: it has margin reach 12.5% in 2029 from 6.0% today, on a fixed-cost base that has barely covered itself. Cautious: it gives the $1.06B of cash no return beyond its face value, and it lets the 12-inch fab add only what is already in my revenue.

The bear is not mild. Its 2027 revenue is 6% below my fourth-quarter run rate, margin falls to 1% in 2028 and it never gets past 7%. Most of its value, 64% of enterprise value, sits after 2036. A stress case with no weight is worse still: 2027 revenue of $3.3B, 2028 of $2.9B, a loss in 2028 and 2029 and a 5% margin after. It gives $5, about 82% below the price. That is close to 2024 and 2025 repeated and extended, and I think it unlikely.

Where this could be in 5 and 10 years

I also asked what the same model says for 2031 and 2036. The table gives my value on each date: the present value then of the owner cash that comes after, per today’s share count and in that year’s dollars. The third column adds the cash paid out up to 2036, including the $0.34 a share I count outside the business today. The last column is the yearly return from $26.74, from price growth plus that cash.

For the base to hold at five years, revenue must reach about $4.65B by 2029 at a 12.5% margin, Vishay must get through a dip in 2030 with margin at 7%, and plant spending must settle near 6% of revenue once Itzehoe is built. By ten years it needs revenue of $5.55B and owner cash of $0.37B a year, 1.6 times the best year in my record. The bear and bull differ on two numbers: settled margin, 7% against 16%, and growth, under 1% against 8% a year. A third number, plant spending, matters more than it looks, since each $0.1B a year is worth $3.2 a share in the base. The bear’s value rises from $8 to $15 by 2031 only because its cash is negative until 2030, and the last column shows it still loses money at today’s price.

The most likely way the base is wrong is on margin. If Vishay settles at 10% instead of 11.5%, the base is about $15, and at 8% it is about $11. The base value rises from $19 today to $27 in 2031 and $31 in 2036 only if each year’s cash arrives on schedule. These are estimates of value, not forecasts of the share price, and the market price can sit above or below value for years.

How good, and how good a price

These are two separate questions. The business: a decent position in resistors, inductors, capacitors and diodes, a weak one in MOSFETs, a wide customer base and a ten-year record of 53 cents of owner cash for each dollar of earnings. It is not a great business by that record. The price: above my base by 41%, and well above the line where my bear case is covered. A fair business at a full price, on my numbers. The market is paying for the version in which margins return to where they were in 2018 and 2022 and the new plant is full.

Other uses of the same dollar

The ten-year Treasury pays 4.94%. My base here returns 6.7% a year at this price, about two points above bonds, against the 11.5% I require, and my bear −1.6% E (estimate).³⁰ The closest comparison on this site is STMicroelectronics, a larger maker of power chips with the same problem of a heavy plant bill: its base returns about 9% a year at a price 17% above base. Broadcom returns 7.5% a year at a price 25% above base, Micron 7.2% at 26% above, and TSMC 7.8% at 18% above. Those pages use their own prices and rates. Vishay’s 6.7% is the lowest of the five, with the price furthest above its base value, 41%. I would not call it safer for being smaller. Its profits are steadier than a memory maker’s and less certain than Broadcom’s.

The margin of safety

• Price$26.74Close, Q4 2026 [1]
• Base value$19My estimate E (estimate)
• Margin of safety below$11set from my bear case C (calculated)

I set the margin of safety from the bear case, as on my Micron and STMicroelectronics pages, because the cycle drives this business. Below $11, 41% under my base value, my $8 bear value is at least three quarters of the price paid. The price is 143% above that line. So the rule is not met here, by a wide margin, and I say so. At $26.74 a buyer who gets my bear case loses 69% of the money in this model, against a gain of 22% in my bull. Two things would change it. A downturn in which margin holds above 5% would lift my bear, and a price at or below $11 would meet the rule. The share closed at $10.57 on 8 April 2025 and $11.82 on 20 November 2025.¹

VIIThe case for the price

What most people miss

Two things cut in the company’s favour. First, the balance sheet turned over in six months: net debt of $436M at the end of 2025 became net cash of $315M on 4 July, after 17.25M new shares sold at $50.00 for $830M net.²²⁶ Those shares are worth $461M at today’s price, so the company raised money at nearly twice what the market now pays.¹ Second, $315M a year of selling and administration is not assigned to any product line and has not grown since 2023, so recovered revenue drops through at a high rate: in the second quarter $156M of extra adjusted revenue brought $43M of extra operating income, an incremental margin near 27% C (calculated).⁶²³

The bull case

The chief executive said with the second-quarter results that demand is strengthening across all end markets, channels and regions.³ The 10-K says management expects higher growth over the next few years than over the last decade, from electrification, factory automation, electric cars, A.I. and 5G.⁶

The one named investor I can verify is a filing, not a view. Situational Awareness LP, Leopold Aschenbrenner’s fund, held 375,000 Vishay shares at 30 June 2026, worth $20,167,500 or $53.78 each, according to its 13F-HR filed on 14 August 2026, 0.1% of the portfolio the filing reports.³³ That says nothing about what it holds now or why. A 13F does not show short positions or holdings outside the US, and I do not infer a view from it. Nasdaq’s feed shows a mean analyst target of $43.33, which I give no weight.³⁴

Against reality

If Vishay does what it says through 2029, my base has it generating $0.34B of owner cash from the second half of 2026 to the end of 2029, 8% of the market value E (estimate). If revenue then reaches $4.65B at a 12.5% margin and Vishay holds 11.5% through a cycle, my base is $19. The price needs about 15%.

Multiplying shows how the odds shrink. For my bull: demand stays strong through 2028, 65%; margin reaches 16%, when it has been above 15% in two of ten years, 30%; the fabs fill with no downturn before 2031, 50%; tariffs and China do not hurt, 80%. That gives 8% E (estimate), perhaps 10% to 15% with overlap, so the 25% weight I give the bull is generous. For the price: revenue near $5.5B by 2029, 50%; margin near 15% after, 30%; no fall back to 5% before 2032, 55%. That is 8% E (estimate). The price asks for the less likely half of my range, and a stock can still sit there: it reached $64.90 in June.¹

What a 10x would take. Ten times $26.74 is $267.40, about $41.4B of market value. At 15 times earnings that needs $2.76B of net income, 6.4 times Vishay’s best year of $0.43B, and at a 12% net margin $23B of revenue, 6.2 times this year’s and about what Texas Instruments sells in a year.⁵ By 2036 that means 26% a year for ten years from $4.1B C (calculated). The stock rose 5.5 times from its November 2025 low to its June high and 1.9 times in ten years, so a fivefold move from a low has happened. A tenfold move from here has no precedent in its record, and I would not build a case on it.¹

Where I come down

The incremental margin and the balance sheet moved me most: they are why my base sits where it does and why the bear is not lower. The June share price did not, and the fall since has no cause I can source. A margin that holds above 5% through the next dip, or MOSFETs reaching 10% with free cash turning positive, would raise my values most. A price near $11 would meet my safety rule.

VIIIRisks, and what would change my view

The three ways this goes badly wrong are at the start of Valuation. These are the rest.

• Tariffs and trade. The Supreme Court struck down certain tariffs on 20 February 2026, the administration said it would use other laws and new tariffs, and Vishay received refunds, of which it passed $30.0M on to customers in the second quarter.² The 10-Q calls the duration, level and effects uncertain. Asia was 42.2% of revenue by customer location in 2025.⁶
• China. 6,900 of 22,600 employees and $207.7M of plant are there, and the 10-K names Taiwan’s Yageo and Cyntec among its rivals in passives.⁶ Export rules could cut either way. I size the China cases below.
• Israel and Germany. Vishay has operated in Israel for 55 years with substantial manufacturing there and says events in the Middle East could hurt it; Germany is the site of the 12-inch fab, and Berlin has approved a grant for it. I size both below.⁶
• Metals. Gold, copper, palladium and tantalum are inputs and traded in active markets; Vishay says its policy is to commit to purchases and that falling prices can force losses on those commitments.⁶ In the second quarter higher volume more than offset higher metals and materials costs.²
• Debt and covenants. The revolver has an interest coverage covenant of 3.25 and a net leverage covenant of 3.25; the notes have a cross-default clause.² At 4 July the ratios were 10.70 and 2.10. If holders convert $750M of notes, Vishay pays cash and may draw the revolver, which has $423M of usable capacity.²
• Dilution. The June offering added 17.25M shares, 13% of the count before it. The plan reserve was raised by 6.0M shares in May.²⁰ At today’s price the notes add no shares.
• Control. Class B shares are 7.9% of the total and carry ten votes each, Ruta Zandman controls 44.3% of the votes, solely or jointly, and a change of auditor in January 2026 followed a competitive process with no disagreement reported.⁷¹⁸
• Environmental and legal. Vishay is involved in remediation programs and as a potentially responsible party at Superfund sites, and a subsidiary is defending a suit by a private landlord, 101 Frost Street Associates, for cleanup costs at a former site in Hicksville, New York, in federal court since 2017.⁶ I cannot size the exposure.

Geopolitical risk, and what it means for the value

About 76% of 2025 revenue came from customers outside the United States. Of 22,600 staff, 6,900 are in China, 2,300 in Germany, 2,000 in Israel and 1,900 in Taiwan, and of $1.67B of net plant Germany holds 30%, China 12%, Taiwan 12% and Israel 6% C (calculated).⁶

Washington sets tariffs. The January 2026 Section 232 proclamation put 25% on certain advanced computing chips only and kept broader semiconductor duties for after trade talks.³⁵ The 10-Q says new tariffs on all countries followed the Supreme Court ruling, and Vishay passed $30.0M of refunds back to customers in the second quarter.² Brussels and Berlin set the money for Itzehoe: in July 2026 the Commission approved a €214M German grant for the plant, with profit sharing and a duty to prioritise deliveries in a shortage.³⁶ The filings I read do not mention it, so my base counts none of it. The Israeli sites are in Dimona, Migdal Ha’Emek and Be’er Sheva. The 10-K says Vishay has never had a material interruption there in 55 years, including the war with Hamas.⁶ Israel and Iran fought in 2026, with a ceasefire from April that broke briefly in June.³⁸ I found no report of damage to Vishay’s plants. Its Israeli subsidiaries booked only $21M of revenue in 2025, so the risk is to output.⁶ On metals, palladium comes mainly from South Africa and Russia, Vishay is a major buyer of tantalum, and a 10% move in commodity costs changes net earnings by $10.8M.⁶ Argus put tantalite at $128 to $132 a pound in February, up 10% in a week, after the Rubaya mine in M23-held Congo collapsed.³⁷

The odds are my judgement E (estimate). For Israel: no stoppage in 55 years, one war year just passed. For tariffs: the proclamation reserves broader duties. For China: Asia was 42% of revenue and China is not split out, so a tenth is a guess. Taiwan is low because I model only Vishay’s own plants; a blockade would hit customers far harder than it hits Vishay, and I cannot model that. Each row changes only that item in my base, which carries today’s tariffs and no break.

Only the two largest cases together reach about $11, the margin-of-safety price. The price of $26.74 already sits above my base, so the market is not charging for these risks on top of my values; if it charges for some, it expects better margins than I do. The grant is the one clear gain I leave out. The model applies each margin change to every later year, which is harsh for items that fade.