Vishay Intertechnology Inc (VSH) Q1 2025 Earnings Call Highlights: Strategic Positioning Amidst ...

Yahoo

08-05-2025

Despite positive signals, there is still uncertainty in customer demand visibility beyond the second quarter, with macroeconomic factors potentially affecting future performance.
The company is facing challenges from tariffs, with a 170% adder on passives from China, potentially impacting customer costs and supply chain decisions.
Gross margin was negatively impacted by lower average selling prices and the inclusion of Legacy Newport products, which dragged down the margin by approximately 200 basis points.
Automotive revenue decreased by 2% due to lower average selling prices and the impact of the Chinese New Year holiday.
The company is making significant progress in its five-year strategic plan, Vishay 3.0, focusing on capacity expansion and innovation, particularly in silicon carbide technology.
Revenue for the first quarter was $715 million, slightly above the midpoint of guidance, indicating strong execution and strategic positioning.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
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Q & A Highlights
Q: Can you provide an update on the distribution strategy and inventory levels? A: Joel Smejkal, President and CEO, explained that there is still work to be done with distribution, as Vishay is working with 17 different business units across various regions. The company is adding SKUs and working with subcontractors to continue expanding its product offerings. Inventory levels have decreased in Europe and the Americas, indicating that Vishay has the right products on the shelf to support POS growth. The company is satisfied with its current inventory position and plans to continue expanding SKUs.
Q: How are tariffs impacting Vishay's revenue and gross margins? A: Joel Smejkal noted that tariffs are expected to increase revenue by 1% to 2%. The company has analyzed its exposure and is offering customers alternative manufacturing locations to mitigate long-term impacts. Dave McConnell, CFO, added that the gross margin impact is approximately a 30 basis point decrease due to the pass-through of tariff costs to customers.
Q: What is the outlook for the Newport fab and its impact on gross margins? A: Joel Smejkal stated that the Newport fab's utilization was low in Q1 as they transitioned from legacy products to Vishay structures. The company plans to increase volume each quarter, aiming for the fab to be gross margin neutral by the first half of 2026. Dave McConnell mentioned that the current guidance includes a 175 to 200 basis point drag on gross margins from Newport.
Q: How is Vishay distinguishing between genuine recovery orders and potential pull-ins from customers? A: Joel Smejkal explained that Vishay is seeing positive trends in smart grid, aerospace and defense, and AI markets, which are less impacted by tariffs. Automotive signals are flat, but there is pent-up demand due to aging vehicles. Industrial programs are improving, and the company is optimistic about real-time order alignment with consumption.
Q: Can you provide insights into the AI business and its growth potential? A: Joel Smejkal reported that AI business more than doubled from Q4 to Q1, with significant design wins in AI servers and components like MOSFETs, diodes, and inductors. The company is working closely with CMs and chipset manufacturers to expand its market share, although specific revenue figures were not disclosed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.