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VISHAY INTERTECHNOLOGY INC

VISHAY INTERTECHNOLOGY INCVSHEarnings & Financial Report

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Vishay Intertechnology, Inc. is an American manufacturer of discrete semiconductors and passive electronic components founded by Polish-born businessman Felix Zandman. Vishay has manufacturing plants in Israel, Asia, Europe, and the Americas where it produces rectifiers, diodes, MOSFETs, optoelectronics, selected integrated circuits, resistors, capacitors, and inductors. Vishay Intertechnology revenues for 2024 were $2.9 billion. At the end of 2024, Vishay had approximately 22,700 full-time e...

What changed in VISHAY INTERTECHNOLOGY INC's 10-K — 2023 vs 2024

Top changes in VISHAY INTERTECHNOLOGY INC's 2024 10-K

380 paragraphs added · 348 removed · 269 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

55 edited+18 added−11 removed96 unchanged
Our products include commodity, non-commodity, and custom products in which we believe we enjoy a good reputation and strong brand recognition, including our Siliconix, Dale, Draloric, Beyschlag, Sfernice, MCB, UltraSource, Applied Thin-Film Products, IHLP®, HiRel Systems, Sprague, Vitramon, Barry, Roederstein, ESTA, and BCcomponents brands.
Our products include commodity, non-commodity, and custom products in which we believe we enjoy a good reputation and strong brand recognition, including our Siliconix, Dale, Draloric, Beyschlag, Sfernice, MCB, UltraSource, Applied Thin-Film Products, IHLP®, HiRel Systems, Sprague, Vitramon, Barry, Roederstein, ESTA, BCcomponents, and Ametherm brands.
We maintain strategically placed design centers where proximity to customers enables us to more easily gauge and satisfy the needs of local markets. These design centers are located predominantly in the United States, Germany, Italy, Israel, Ireland, the People’s Republic of China, France, and the Republic of China (Taiwan).
We maintain strategically placed design centers where proximity to customers enables us to more easily gauge and satisfy the needs of local markets. These design centers are located predominantly in the United States, the United Kingdom, Germany, Italy, Israel, Ireland, the People’s Republic of China, France, and the Republic of China (Taiwan).
In the United States, our manufacturing facilities are located in California, Connecticut, Massachusetts, Minnesota, Nebraska, New Hampshire, New York, Rhode Island, South Dakota, Vermont, and Wisconsin. In Asia, our main manufacturing facilities are located in the People’s Republic of China, the Republic of China (Taiwan), India, and Malaysia.
In the United States, our manufacturing facilities are located in California, Connecticut, Massachusetts, Minnesota, Nebraska, Nevada, New Hampshire, New York, Rhode Island, South Dakota, Vermont, and Wisconsin. In Asia, our main manufacturing facilities are located in the People’s Republic of China, the Republic of China (Taiwan), India, and Malaysia.
Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future. 13 With each acquisition, we attempt to identify potential environmental concerns and to minimize, or obtain indemnification for, the environmental matters we may be required to address.
Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future. 14 With each acquisition, we attempt to identify potential environmental concerns and to minimize, or obtain indemnification for, the environmental matters we may be required to address.
To view the reports, access ir.vishay.com and click on “SEC Filings.” The following corporate governance related documents are also available on our website: • Corporate Governance Principles • Code of Business Conduct and Ethics • Code of Ethics for Financial Officers • Audit Committee Charter • Nominating and Corporate Governance Committee Charter • Compensation Committee Charter • Executive Stock Ownership Guidelines • Director Stock Ownership Guidelines • Clawback Policy • Hedging-Pledging Policy • Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors • Related Party Transactions Policy To view these documents, access ir.vishay.com and click on “Corporate Governance.” Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 14
To view the reports, access ir.vishay.com and click on “SEC Filings.” The following corporate governance related documents are also available on our website: • Corporate Governance Principles • Code of Business Conduct and Ethics • Code of Ethics for Financial Officers • Audit Committee Charter • Nominating and Corporate Governance Committee Charter • Compensation Committee Charter • Amended and Restated Executive Stock Ownership Guidelines • Director Stock Ownership Guidelines • Clawback Policy • Hedging-Pledging Policy • Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors • Related Party Transactions Policy To view these documents, access ir.vishay.com and click on “Corporate Governance.” Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 15
In Europe, our main manufacturing facilities are located in Germany, France, and the Czech Republic. We have substantial manufacturing facilities in Israel. We also have manufacturing facilities in Austria, Dominican Republic, Japan, Hungary, Italy, Mexico, Portugal, and the Philippines.
In Europe, our main manufacturing facilities are located in Germany, the United Kingdom, France, and the Czech Republic. We have substantial manufacturing facilities in Israel and Mexico. We also have manufacturing facilities in Austria, Dominican Republic, Japan, Hungary, Italy, Portugal, and the Philippines.
This decentralized system encourages product development at individual manufacturing facilities, closer to our customers. 11 Competition We face strong competition in various product lines from both domestic and foreign manufacturers.
This decentralized system encourages product development at individual manufacturing facilities, closer to our customers. 12 Competition We face strong competition in various product lines from both domestic and foreign manufacturers.
Our agreements may limit our ability to increase production, particularly during periods of growing demand for our products. 10 Due to our global supply chain, we are impacted by global trade disputes.
Our agreements may limit our ability to increase production, particularly during periods of growing demand for our products. 11 Due to our global supply chain, we are impacted by global trade disputes.
Together with major manufacturers of electronic products worldwide, we are supporting next level automation in multiple areas, including factories, the electrification of the automobile, 5G network technology, and the rapid expansion of connectivity across everything (IoT). We continue to implement Dr. Zandman’s vision, strategy, and culture as we work tirelessly to enhance value for our stockholders.
Together with major manufacturers of electronic products worldwide, we are supporting next level automation in multiple areas, including factories, the electrification of the automobile, 5G network technology, artificial intelligence ("A.I."), and the rapid expansion of connectivity across everything (IoT). We continue to implement Dr. Zandman’s vision, strategy, and culture as we work tirelessly to enhance value for our stockholders.
Growth through Strategic Acquisitions We plan to continue to expand within the electronic components industry, through the acquisition of other manufacturers of electronic components that have established positions in major markets, reputations for product innovation, quality, and reliability, strong customer bases, and product lines with which we have substantial marketing and technical expertise.
Mergers and Acquisitions We also plan to continue to expand within the electronic components industry, through the acquisition of other manufacturers of electronic components that have established positions in major markets, reputations for product innovation, quality, and reliability, strong customer bases, and product lines with which we have substantial marketing and technical expertise.
We aim to use this broad portfolio to increase opportunities to have our components selected and “designed in” to new end products. We consider any product which is completely interchangeable with a competitor’s product to be a “commodity product.” Commodity products serve many markets. For 2023, commodity products comprised 31% of our revenues.
We aim to use this broad portfolio to increase opportunities to have our components selected and “designed in” to new end products. We consider any product which is completely interchangeable with a competitor’s product to be a “commodity product.” Commodity products serve many markets. For 2024, commodity products comprised 27% of our revenues.
With selected customers, we have signed longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customers represent approximately 68% of our total net revenues. No single customer comprised more than 10% of our total net revenues for 2023. In certain areas we also work with sales representatives.
With selected customers, we have signed longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customers represent approximately 72% of our total net revenues. No single customer comprised more than 10% of our total net revenues for 2024. In certain areas we also work with sales representatives.
Our MOSFETs product line includes low- and medium-voltage TrenchFET MOSFETs, high-voltage planar MOSFETs, high voltage Super Junction MOSFETs, power integrated circuits (power ICs), and integrated function power devices. We are one of the technology leaders in MOSFETs, with a tradition of innovation in wafer design, packaging, and performance.
Our MOSFETs product line includes low- and medium-voltage TrenchFET MOSFETs, high-voltage planar MOSFETs, high voltage Super Junction MOSFETs, power integrated circuits (power ICs), and integrated function power devices. We are one of the technology leaders in MOSFETs, with a tradition of innovation in wafer design, packaging, and performance. Our acquisition of MaxPower Semiconductor, Inc.
Approximately 30% of our annual Capacitors segment revenues were generated by products that were developed in the previous five years. 9 Military Qualifications We have qualified certain of our products under various military specifications approved and monitored by United States government agencies, and under certain European military specifications.
Approximately 35% of our annual Capacitors segment revenues were generated by products that were developed in the previous five years. 10 Military Qualifications We have qualified certain of our products under various military specifications approved and monitored by United States government agencies, and under certain European military specifications.
Human Capital As a global company, we collaborate internationally and celebrate the diversity of our local cultures. Employees are encouraged to bring their unique perspectives, help identify opportunities to collaborate, and open themselves to the career development that comes from learning from others. As of December 31, 2023, we employed approximately 23,500 full time employees worldwide.
Human Capital As a global company, we collaborate internationally and celebrate the diversity of our local cultures. Employees are encouraged to bring their unique perspectives, help identify opportunities to collaborate, and open themselves to the career development that comes from learning from others. As of December 31, 2024, we employed approximately 22,700 full time employees worldwide.
Our broad range of standard and customer specific optoelectronic components includes infrared (“IR”) emitters and detectors, IR remote control receivers, optocouplers, solid-state relays, optical sensors, light-emitting diodes (“LEDs”), 7-segment displays, and IR data transceiver modules (IrDA®).
Optoelectronic Components Segment Optoelectronic components emit light, detect light, or do both. Our broad range of standard and customer specific optoelectronic components includes infrared (“IR”) emitters and detectors, IR remote control receivers, optocouplers, solid-state relays, optical sensors, light-emitting diodes (“LEDs”), 7-segment displays, and IR data transceiver modules (IrDA®).
To optimize production efficiencies, we have whenever practicable established manufacturing facilities in countries, such as India, Israel, Malaysia, Mexico, the People’s Republic of China, and the Philippines, where we can benefit from lower labor costs and also benefit from various government incentives, including tax relief. One of our most sophisticated manufacturing operations is the production of power semiconductor components.
To optimize production efficiencies, we have whenever practicable established manufacturing facilities in countries, such as India, Israel, Malaysia, Mexico, the People’s Republic of China, and the Philippines, where we can benefit from lower labor costs. One of our most sophisticated manufacturing operations is the production of power semiconductor components.
Reflecting our global business, our executive management team and many leadership positions are dispersed throughout the world. 12 Employees by location are summarized as follows: United States 2,400 People’s Republic of China 7,300 Germany 2,300 Israel 2,300 Taiwan 2,000 Czech Republic 1,200 India 1,000 Other Europe 1,600 Other Americas 1,500 Other Asia 1,900 Total 23,500 Many of our employees outside the United States are members of workers councils or unions or otherwise subject to collective bargaining agreements.
Reflecting our global business, our executive management team and many leadership positions are dispersed throughout the world. 13 Employees by location are summarized as follows: United States 2,200 People’s Republic of China 6,900 Germany 2,300 Israel 2,000 Taiwan 1,900 Czech Republic 1,200 India 1,100 Other Europe 2,000 Other Americas 1,300 Other Asia 1,800 Total 22,700 Many of our employees outside the United States are members of workers councils or unions or otherwise subject to collective bargaining agreements.
Approximately 15% of our annual Inductors segment revenues were generated by products that were developed in the previous five years. Capacitors Segment Capacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-quality products.
Substantially all of our Inductors segment products are certified or custom products. Approximately 20% of our annual Inductors segment revenues were generated by products that were developed in the previous five years. Capacitors Segment Capacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-quality products.
We intend to leverage our insights into customer demand to continually develop new innovative products within our existing lines and to modify our existing core products to make them more appealing, addressing changing customer needs and industry trends.
Innovation Our ability to react to changing customer needs and industry trends will continue to be key to our success. We intend to leverage our insights into customer demand to continually develop new innovative products within our existing lines and to modify our existing core products to make them more appealing, addressing changing customer needs and industry trends.
We aim to further strengthen our relationships with customers and strategic partners by providing broad product lines that allow us to provide “one-stop shop” service, whereby they can streamline their design and purchasing processes by ordering multiple types of products, by anticipating customer needs, and supporting increasing customer demand.
Enhanced Channel Management We aim to further strengthen our relationships with customers and strategic partners by understanding customers' technical needs and providing broad product lines that allow us to provide “one-stop shop” service, whereby they can streamline their design and purchasing processes by ordering multiple types of products from Vishay.
Our net cash position and short-term investment balance, available revolving commitment, and “free cash” flow generation provide financial strength and flexibility and reduce our exposure to future economic uncertainties. 5 Our Key Challenges Economic Environment Our business and operating results have been and will continue to be impacted by the global economy and the local economies in which our customers operate.
We believe our strong cash position and available revolving credit facility provide financial strength and flexibility and reduce our exposure to future economic uncertainties. 5 Our Key Challenges Economic Environment Our business and operating results have been and will continue to be impacted by the global economy and the local economies in which our customers operate.
We are directing increased funding and are focusing on developing products to capitalize on the mega trends of electrification, data storage, and wireless communications that are critical to our future success. We are also investing in additional capital expenditures to expand key product lines.
We are directing increased funding and are focusing on developing products to capitalize on the mega trends of electrification, data storage, and wireless communications that are critical to our future success.
Over the next few years, we expect to experience higher growth rates than over the last decade. This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, and 5G infrastructure.
We have identified eight strategic levers to achieve our goals: Internal Capacity Expansion Over the next few years, we expect to experience higher growth rates than over the last decade. This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, A.I., and 5G infrastructure.
The unavailability or reduced availability of these resources could require us to reduce production or incur additional costs. We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication and the assembly and testing of finished goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited.
The unavailability or reduced availability of these resources could require us to reduce production or incur additional costs. We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication, the assembly and testing of finished goods, and the manufacturing of certain commodity products.
This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, and 5G infrastructure. See Note 15 to our consolidated financial statements for net revenues by region and end market.
This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, A.I., and 5G infrastructure. We are investing to expand internal and external capacity to meet customers' expected increased demand. See Note 15 to our consolidated financial statements for net revenues by region and end market.
The portfolio of protection diodes includes ESD protection and EMI filter. Our thyristors or SCR (silicon-controlled rectifiers) are very popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EV are the focus of our power modules business (IGBT or MOSFET modules).
Our thyristors or SCR (silicon-controlled rectifiers) are very popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EV are the focus of our power modules business (IGBT or MOSFET modules). These modules can be customized to fit in different customer design requirements.
Our wet tantalum and MicroTan™ technologies are market leaders. In 2023, commodity products comprised 28% of our annual Capacitors segment revenues. Non-commodity products comprised 48% of our annual Capacitors segment revenues. Custom products comprised 24% of our annual Capacitors segment revenues.
Our wet tantalum and MicroTan™ technologies are market leaders. In 2024, commodity products comprised 23% of our annual Capacitors segment revenues. Certified products comprised 52% of our annual Capacitors segment revenues. Custom products comprised 25% of our annual Capacitors segment revenues.
MOSFETs Segment MOSFETs function as solid state switches to control power. Our MOSFETs business includes both the commodity and non-commodity markets in which we believe that we enjoy a good reputation and strong brand recognition (Siliconix).
Semiconductors are typically used to perform functions such as switching, amplifying, rectifying, routing, or transmitting electrical signals, power conversion, and power management. MOSFETs Segment MOSFETs function as solid state switches to control power. Our MOSFETs business includes both the commodity and non-commodity markets in which we believe that we enjoy a good reputation and strong brand recognition (Siliconix).
Our acquisition of MaxPower Semiconductor, Inc. on October 28, 2022 adds leading edge silicon and silicon carbide technology to our MOSFETs product line. Our pending acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment. In 2023, commodity products comprised 45% of our annual MOSFETs segment revenues.
("MaxPower") adds leading edge silicon and silicon carbide technology to our MOSFETs product line. Our acquisition of Nexperia's Newport fab on March 5, 2024 will enhance the manufacturing capacity and capabilities of our MOSFETs segment. In 2024, commodity products comprised 37% of our annual MOSFETs segment revenues. Certified products comprised 47% of our annual MOSFETs segment revenues.
Our low-profile, high-current inductors save circuit board space and power in voltage regulator module (“VRM”) and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions focusing on high performance and high reliability. Substantially all of our Inductors segment products are non-commodity or custom products.
Vishay inductor innovations include our patented IHLP low-profile, high-current inductor technology with industry-leading specifications. Our low-profile, high-current inductors save circuit board space and power in voltage regulator module (“VRM”) and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions focusing on high performance and high reliability.
Due to our strong operational management, cost control measures, efficient capital expenditures, broad product portfolio, and strong market position, we have generated positive “free cash” in each of the past 27 years. Our aggressive capital expenditure plans for 2023 - 2025 have limited and will limit "free cash" generation over that time frame.
Due to our strong operational management, cost control measures, efficient capital expenditures, broad product portfolio, and strong market position, we have historically generated strong “free cash.” Our aggressive capital expenditure plans for 2023 - 2025 have and will negatively impact our "free cash" generation over that time frame, after which we expect to generate increasingly higher levels of free cash.
Our agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require us to recognize losses on these adverse purchase commitments.
Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. Our agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require us to recognize losses on these adverse purchase commitments.
Our wide selection of small signal diodes consist of the following functions: switching, tuning, band-switching, RF attenuation and voltage regulation (Zener). They are available in various glass and plastic packaging options and generally are used in electronic circuits, where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage suppressor) diodes.
They are available in various glass and plastic packaging options and generally are used in electronic circuits, where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage suppressor) diodes. The portfolio of protection diodes includes ESD protection and EMI filter.
Non-commodity products comprised 42% of our annual MOSFETs segment revenues. Custom products comprised 13% of our annual MOSFETs segment revenues. Approximately 30% of our annual MOSFETs segment revenues were generated by products that were developed in the previous five years.
In 2024, commodity products comprised 56% of our annual Diodes segment revenues. Certified products comprised 26% of our annual Diodes segment revenues. Custom products comprised 18% of our annual Diodes segment revenues. Approximately 25% of our annual Diodes segment revenues were generated by products that were developed in the previous five years.
We focus on higher value markets in specialized industries, such as the industrial, automotive, military, and medical end markets. Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage. Vishay inductor innovations include our patented IHLP low-profile, high-current inductor technology with industry-leading specifications.
We are a market leader with a strong technology base, many specialty products, and strong name recognition (such as our IHLP® and HiRel Systems brands). We focus on higher value markets in specialized industries, such as the industrial, automotive, military, and medical end markets. Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage.
Linear resistive components are classified as variable or fixed, depending on whether or not their resistance is adjustable. Non-linear resistors function by varying in resistance under influence of temperature (thermistors) or voltage (varistors). They can be used in temperature-measuring applications or as current or voltage-limiting devices.
Resistors vary widely in precision and cost, and are manufactured from numerous materials and in many forms. Linear resistive components are classified as variable or fixed, depending on whether or not their resistance is adjustable. Non-linear resistors function by varying in resistance under influence of temperature (thermistors) or voltage (varistors).
We manufacture virtually all types of fixed resistors, both in discrete and network forms, as well as many variable types. Vishay resistor innovations include Power Metal Strip® technology. These resistors feature very low resistance and are used to measure changes in current flow (current sensing) or divert current flow (shunting).
They can be used in temperature-measuring applications or as current or voltage-limiting devices. We manufacture virtually all types of fixed resistors, both in discrete and network forms, as well as many variable types. Vishay resistor innovations include Power Metal Strip® technology.
Applications include telecommunications, mobile phones, smartphone, handheld devices, digital cameras, laptops, desktop computers, LED backlighting, office automation equipment, household electrical appliance and automotive electronics. Our LEDs are designed for backlighting and illumination in automotive and other applications. Our LEDs include ultra-bright as well as small surface-mount packages, with products available in all standard colors including white.
Our optical sensors products include ambient light sensors, optical encoders, integrated photodiode and I/V amplifiers, proximity sensors, color sensors, and UV sensors. Applications include telecommunications, mobile phones, smartphone, handheld devices, digital cameras, laptops, desktop computers, LED backlighting, office automation equipment, household electrical appliance and automotive electronics. Our LEDs are designed for backlighting and illumination in automotive and other applications.
All of our Optoelectronic Components segment products are non-commodity or custom products. Approximately 25% of our annual Optoelectronic Components segment revenues were generated by products that were developed in the previous five years. 8 Passive Components Our passive components include resistors, inductors, and capacitors.
Approximately 40% of our annual Optoelectronic Components segment revenues were generated by products that were developed in the previous five years. 9 Passive Components Our passive components include resistors, inductors, and capacitors. Passive components are used to store electrical charges, to limit or resist electrical current, and to help in filtering, surge suppression, measurement, timing, and tuning applications.
Passive components are used to store electrical charges, to limit or resist electrical current, and to help in filtering, surge suppression, measurement, timing, and tuning applications. Resistors Segment Resistors impede electric current. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. Our Resistors business is our original business.
Resistors Segment Resistors impede electric current. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. Our Resistors business is our original business. We maintain the broadest portfolio of resistor products worldwide.
Our semiconductor and passive components products are further categorized based on their functionality for financial reporting purposes. 7 Semiconductors Our semiconductor products include metal oxide semiconductor field-effect transistors ("MOSFETs"), diodes, and optoelectronic components. Semiconductors are typically used to perform functions such as switching, amplifying, rectifying, routing, or transmitting electrical signals, power conversion, and power management.
Semiconductors are sometimes referred to as “active components” because they require power to function whereas passive components do not require power to function. Our semiconductor and passive components products are further categorized based on their functionality for financial reporting purposes. 8 Semiconductors Our semiconductor products include metal oxide semiconductor field-effect transistors ("MOSFETs"), diodes, and optoelectronic components.
We focus on higher value markets in specialized industries, while maintaining a complete portfolio of commodity products. We do not aim to be the volume leader in commodity markets. Resistors vary widely in precision and cost, and are manufactured from numerous materials and in many forms.
We are a market leader with a strong technology base, many specialty products, and strong brand recognition (such as our Dale, Draloric, Beyschlag, Sfernice, and Ametherm brands). We focus on higher value markets in specialized industries, while maintaining a complete portfolio of commodity products. We do not aim to be the volume leader in commodity markets.
Vishay is the worldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumer markets. Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power loss and improves the efficiency of end systems and eSMP®, the best in class high-current density surface mount packages.
Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power loss and improves the efficiency of end systems and eSMP®, the best in class high-current density surface mount packages. Our wide selection of small signal diodes consist of the following functions: switching, tuning, band-switching, RF attenuation and voltage regulation (Zener).
We evaluate our level of product innovation by measuring how much of our revenue is derived from products developed in the previous five years. Products for certain end-use markets, particularly the automotive market, tend to have longer product life cycles, which may impact these metrics.
Products for certain end-use markets, particularly the automotive market, tend to have longer product life cycles, which may impact these metrics. Approximately 30% of our annual revenues are generated by products that were developed in the previous five years. Product Segments Our products can be divided into two general classes: semiconductors and passive components.
For 2023, non-commodity products comprised 47% of our revenues. We also sell several custom products. Usually, a custom product is designed for a specific customer, and such part number is sold to only that customer. For 2023, custom products comprised 22% of our revenues.
Usually, a custom product is designed for a specific customer, and such part number is sold to only that customer. For 2024, custom products comprised 24% of our revenues. We evaluate our level of product innovation by measuring how much of our revenue is derived from products developed in the previous five years.
Diodes Segment Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering. Our Diodes business is a solid business with a strong market presence in both the commodity and non-commodity markets.
Custom products comprised 16% of our annual MOSFETs segment revenues. Approximately 35% of our annual MOSFETs segment revenues were generated by products that were developed in the previous five years. Diodes Segment Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering.
For a more detailed discussion of the risks and uncertainties inherent in our business, which could materially and adversely affect our business, results of operations or financial condition, see “Risk Factors” in Item 1A. 6 Key Business Strategies Our business strategy principally consists of the following elements: Think Customer First We maintain significant production facilities in those regions where we market the bulk of our products in order to enhance the service and responsiveness that we provide to our customers.
For a more detailed discussion of the risks and uncertainties inherent in our business, which could materially and adversely affect our business, results of operations or financial condition, see “Risk Factors” in Item 1A. 6 Key Business Strategies We have entered into a new era at Vishay that focuses on being a customer first, business-minded company that is designed to drive profitable growth, which we are calling Vishay 3.0.
Organizationally, Vishay continues to evolve and change to meet or exceed customer and market demands, requiring heightened collaboration and agility. We continue to embed a high-performance culture whereby employees are encouraged to surface ideas, employ continuous improvement attitudes, and work together to achieve our organizational goals.
Vishay is continuously evolving to meet or exceed customer and market demands, which requires increased collaboration and agility. We are fostering a high-performance culture in which employees are encouraged to share ideas, adopt continuous improvement practices, and work together to achieve our organizational goals. Our training and communication efforts focus on instilling a mindset of accountability and ownership.
Inductors use an internal magnetic field to change alternating current phase and resist alternating current. While part of our traditional business, the inductors product line has grown significantly in recent years. We are a market leader with a strong technology base, many specialty products, and strong name recognition (such as our IHLP® and HiRel Systems brands).
Approximately 20% of our annual Resistors segment revenues were generated by products that were developed in the previous five years. Inductors Segment Inductors also impede electric current. Inductors use an internal magnetic field to change alternating current phase and resist alternating current. While part of our traditional business, the inductors product line has grown significantly in recent years.
It also includes certain businesses that possess technologies which we expect to further develop and commercialize and key niche suppliers that allow us to vertically integrate our supply chain. Cost Management We place a strong emphasis on controlling our costs. We focus on controlling fixed costs and reducing variable costs.
It also includes certain businesses that possess technologies which we expect to further develop and commercialize, businesses that we grow using our manufacturing capabilities, capacity, and economies of scale and global customer base, and key niche suppliers that allow us to vertically integrate our supply chain. 7 Products We design, manufacture, and market electronic components that cover a wide range of functions and technologies.
We consider any of our standard products that may be sold to multiple customers, which is not completely interchangeable with a competitor’s product, to be a “non-commodity” product. Non-commodity products generally have a small number of competitors who have similar, but not exact, products. Non-commodity products typically serve a particular end-use market.
We consider products that generally are produced by a small number of competitors who have similar, but not exact, products to be "certified" products. Certified products typically have a qualification and serve a particular end-use market. For 2024, certified products comprised 49% of our revenues. We also sell several custom products.
The products that comprise our Diodes business represent our broadest product line and include rectifiers, small signal diodes, protection diodes, thyristors/SCRs and power modules. The primary application of rectifiers, found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC supply.
Our Diodes business has a strong market presence in both the commodity and non-commodity markets. The products that comprise our Diodes business represent our broadest product line and include rectifiers, small signal diodes, protection diodes, thyristors/SCRs and power modules.
Training and communication efforts have been implemented to ensure all employees know what is expected of them. The first phase of implementing a global human capital management system was completed in late 2023 to support our international workforce's communication, development, and efficient business processes.
In late 2023, we completed the first phase of implementing a global human capital management system. This system is designed to enhance communication, development, and efficient business processes for our international workforce. In 2025, we will implement additional modules to further expand our capabilities for leveraging global talent and consistently enforcing performance standards.
Invest in Innovation to Drive Growth We plan to continue to use our research and development (“R&D”), engineering, and product marketing resources to continually roll out new and innovative products.
Increased Technical Headcount As part of our plan to foster intensified internal growth, we are focusing on increasing our technical resources, adding additional customer-facing engineers, and intensifying our activities in R&D. We plan to continue to use our R&D, engineering, and product marketing resources to continually roll out new and innovative products.
Removed
Financial Strength and Flexibility As of December 31, 2023, our cash and short-term investment balance exceeded our debt balance by $190.3 million. We also maintain a credit facility, which provides a revolving commitment of up to $750 million through May 8, 2028, of which substantially all was available as of December 31, 2023.
Added
We are engaging with customers to better understand their technical product needs and developing reference designs to meet their needs using the breadth of our product portfolio.
Removed
As part of our plan to foster intensified internal growth, we have increased our worldwide R&D and engineering technical staff, and increased our technical field sales force in Asia to increase opportunities to design-in our products in local markets. Our ability to react to changing customer needs and industry trends will continue to be key to our success.
Added
Financial Strength and Flexibility Over the past few years, we have been deploying our accumulated cash to expand our manufacturing capacity for the future.
Removed
When our ongoing cost management activities are not adequate, we take actions to maintain our cost competitiveness including restructuring our business to improve efficiency and operating performance. Our growth plan was designed based on the tenets of the key business strategies listed above. Products We design, manufacture, and market electronic components that cover a wide range of functions and technologies.
Added
We are investing in additional capital expenditures to expand key product lines to increase internal capacity and meet customers' needs.
Removed
Approximately 25% of our annual revenues are generated by products that were developed in the previous five years. Product Segments Our products can be divided into two general classes: semiconductors and passive components. Semiconductors are sometimes referred to as “active components” because they require power to function whereas passive components do not require power to function.
Added
These projects include the Newport wafer fab; a new site in Mexico for power inductors and non-linear resistors; a resistor manufacturing expansion in Mexico; expanded 8" diode manufacturing in Taiwan and Turin, Italy; and the new MOSFET 12” fab in Itzehoe, Germany.
Removed
These modules can be customized to fit in different customer design requirements. In 2023, commodity products comprised 55% of our annual Diodes segment revenues. Non-commodity products comprised 26% of our annual Diodes segment revenues. Custom products comprised 19% of our annual Diodes segment revenues.
Added
External Capacity Expansion We are expanding our external capacity, engaging in developing partnerships with subcontractors to outsource production of some commodity products to create incremental capacity for our higher growth and higher return products. Each reportable segment is evaluating subcontractors, including supporting front-end capacities for our semiconductor segments.
Removed
Approximately 30% of our annual Diodes segment revenues were generated by products that were developed in the previous five years. Optoelectronic Components Segment Optoelectronic components emit light, detect light, or do both. Our Optoelectronic Components business has a strong market presence in both the commodity and non-commodity markets.
Added
We maintain significant production facilities in those regions where we market the bulk of our products to reduce lead times and enhance the service and responsiveness that we provide our customers.
Removed
Our optical sensors product line was considerably strengthened by our acquisition of Capella in 2014. Our optical sensors products include ambient light sensors, optical encoders, integrated photodiode and I/V amplifiers, proximity sensors, color sensors, and UV sensors.
Added
Optimizing Global Manufacturing Footprint We are evaluating our global manufacturing footprint and began taking steps to optimize it by announcing the closure of three manufacturing sites as part of the restructuring actions that were announced in September 2024. See additional information in Note 3 to our consolidated financial statements.
Removed
We maintain the broadest portfolio of resistor products worldwide. Under current market conditions, the business is solid, predictable, and growing at relatively stable selling prices. We are a market leader with a strong technology base, many specialty products, and strong brand recognition (such as our Dale, Draloric, Beyschlag, and Sfernice brands).
Added
We have seen and will continue to see an increase in operating expenses over the next couple of years as we add these engineering talents.
Removed
In 2023, commodity products comprised 19% of our annual Resistors segment revenues. Non-commodity products comprised 53% of our annual Resistors segment revenues. Custom products comprised 28% of our annual Resistors segment revenues. Approximately 15% of our annual Resistors segment revenues were generated by products that were developed in the previous five years. Inductors Segment Inductors also impede electric current.
Added
Our investments in internal and external capacity expansion allow us to provide customers with a continuous supply of products and assure them that we have capacity to scale when needed.
Removed
During 2023, resources were added to lead the global functions of Talent Acquisition and Total Rewards to refine our focus on attracting and nurturing key talent. Incentive compensation programs have been revised to create a unified focus on profitable growth.
Added
By increasing our capacity and capabilities, we are also enhancing our ability to support all the business channels, while maximizing the profitability of each one through a focus on higher margin customers. We are providing greater technical support and engaging with customers’ in-house design engineers through our expanding field application engineers staff.
Removed
Organizational and structural changes that have allowed us to flatten the organizational structure and redefine some leadership roles continue to be implemented. We empower our employees by pushing down decision-making, and in turn, we speed up decision-making across the organization.
Added
We maintain significant production facilities in those regions where we market the bulk of our products to reduce lead times and enhance the service and responsiveness that we provide to our customers. Our acquisition and R&D activities are broadening our product offerings and allowing us to expand the portfolio of products we sell to catalogue distributors.
Added
Vishay Solutions Another area of focus is our introduction of solution selling, speaking to customer engineers about applications, and the performance improvement that Vishay components can bring from the full array of our portfolio. Customer engineers look for suppliers who can provide solutions to advance their technologies.
Added
We are developing reference designs to meet customer needs using the breadth of our product portfolio. Vishay’s semiconductors and passive components can populate greater than 80% of the components on the circuit board in many applications.
Added
The primary application of rectifiers, found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC supply. Vishay is the worldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumer markets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

57 edited+32 added−7 removed112 unchanged
These provisions include: • the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions; • the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause, each of which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt. 22 In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
These provisions include: • the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions; • the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause, each of which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt. 24 In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
The loss of the services of or the failure to effectively recruit qualified personnel could have a material adverse effect on our business. Significant fluctuations in interest rates could adversely affect our results of operations and financial position. We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances.
The loss of the services of or the failure to effectively recruit qualified personnel could have a material adverse effect on our business. 19 Significant fluctuations in interest rates could adversely affect our results of operations and financial position. We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances.
Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business, and result in a material adverse effect on our reputation, business and results of operations or financial condition. We attempt to improve profitability by controlling labor costs, but these activities could result in labor unrest or considerable expense.
Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business, and result in a material adverse effect on our reputation, business and results of operations or financial condition. 21 We attempt to improve profitability by controlling labor costs, but these activities could result in labor unrest or considerable expense.
Shifting operations to lower-labor-cost countries, reducing hours, or limiting the use of subcontractors and foundries could result in production inefficiencies, higher costs, and/or strikes or other types of labor unrest. 19 We are subject to foreign currency exchange rate risks which may impact our results of operations.
Shifting operations to lower-labor-cost countries, reducing hours, or limiting the use of subcontractors and foundries could result in production inefficiencies, higher costs, and/or strikes or other types of labor unrest. We are subject to foreign currency exchange rate risks which may impact our results of operations.
However, there can be no assurance that the interest rate earned on cash and short-term investments will move in tandem with the interest rate paid on our variable rate debt. 17 Cyberattacks and other interruptions in our information technology systems could adversely affect our business.
However, there can be no assurance that the interest rate earned on cash and short-term investments will move in tandem with the interest rate paid on our variable rate debt. Cyberattacks and other interruptions in our information technology systems could adversely affect our business.
Our agreements may limit our ability to increase production, particularly during periods of growing demand for our products. Due to our global supply chain, we are impacted by global trade disputes.
Our agreements may limit our ability to increase production, particularly during periods of growing demand for our products. 18 Due to our global supply chain, we are impacted by global trade disputes.
We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. From time to time, we utilize forward contracts to hedge a portion of projected cash flows from these exposures. Our significant foreign subsidiaries are located in Germany, Israel, and Asia.
We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. From time to time, we utilize forward contracts to hedge a portion of projected cash flows from these exposures. Our significant foreign subsidiaries are located in Germany, Israel, the United Kingdom, and Asia.
Although we have never experienced any material interruption in our operations attributable to these factors, in spite of several Middle East crises, including the current war with Hamas, our financial condition and results of operations might be adversely affected if events were to occur in the Middle East that interfered with our operations in Israel.
Although we have never experienced any material interruption in our operations attributable to these factors, in spite of several Middle East crises, including the recent war with Hamas, our financial condition and results of operations might be adversely affected if events were to occur in the Middle East that interfered with our operations in Israel.
Our exposure to foreign currency risk is more pronounced in situations where, for example, production labor costs are predominantly paid in local currencies while the sales revenue for those products is denominated in U.S. dollars. This is particularly the case for products produced in Israel, the Czech Republic, and China.
Our exposure to foreign currency risk is more pronounced in situations where, for example, production labor costs are predominantly paid in local currencies while the sales revenue for those products is denominated in U.S. dollars. This is particularly the case for products produced in Israel, the United Kingdom, the Czech Republic, and China.
Risks associated with our operations outside the United States We are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate. We have substantial operations outside the United States, and approximately 74% of our revenues during 2023 were derived from sales to customers outside the United States.
Risks associated with our operations outside the United States We are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate. We have substantial operations outside the United States, and approximately 74% of our revenues during 2024 were derived from sales to customers outside the United States.
We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business. We are exposed to, and may be adversely affected by, potential cyberattacks or other disruptions to our information technology systems and data security.
We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business. We are exposed to, and adversely affected by, cyberattacks or other potential disruptions to our information technology systems and data security.
Other unknown and unpredictable factors also could have a material adverse effect on our future financial condition and results of operations. 23
Other unknown and unpredictable factors also could have a material adverse effect on our future financial condition and results of operations. 25
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7% of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023.
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7% of our Class B common stock and 44.4% of the total voting power of our capital stock as of December 31, 2024.
We finance our operations in Europe and certain locations in Asia in local currencies. Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local currencies.
We finance our operations in Europe and certain locations in Asia in local currencies. Our operations in Israel, the United Kingdom, and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local currencies.
These products are assigned certain classification levels. In order to maintain the classification level of a product, we must continuously perform tests on the products and the results of these tests must be reported to governmental agencies. If a product fails to meet the requirements of the applicable classification level, its classification may be reduced to a lower level.
In order to maintain the classification level of a product, we must continuously perform tests on the products and the results of these tests must be reported to governmental agencies. If a product fails to meet the requirements of the applicable classification level, its classification may be reduced to a lower level.
At December 31, 2023, the holders of Class B common stock held approximately 49.1% of the voting power of the Company. The ownership of Class B common stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approve other actions as stockholders. Mrs.
At December 31, 2024, the holders of Class B common stock held approximately 49.4% of the voting power of the Company. The ownership of Class B common stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approve other actions as stockholders. Mrs.
Our business has been in operation in Israel for 53 years, where we have substantial manufacturing operations.
Our business has been in operation in Israel for 54 years, where we have substantial manufacturing operations.
If we are not in compliance with all of such covenants, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible debt instruments have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.
If we are not in compliance with all of such covenants, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible senior notes due 2030 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.
In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the notes or holders of our common stock may view as favorable. 21 The capped call transactions may affect the market price of our common stock.
In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the notes or holders of our common stock may view as favorable.
There are also inherent execution risks in building and starting new wafer fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase costs and negatively impact our operating results.
There are demand-related risks associated with all growth initiatives. There are also inherent execution risks in building and starting new wafer fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase costs and negatively impact our operating results.
The U.S. has taken actions that impact U.S. trade with China, including restricting the export of certain goods and equipment to China, imposing tariffs on certain goods manufactured in China and imported into the U.S., including certain of our products.
The U.S. has taken actions that impact U.S. trade with China, including restricting the export of certain goods and equipment to China, imposing tariffs on certain goods manufactured in China and imported into the U.S., including certain of our products. The U.S. has also threatened to impose tariffs on certain goods manufactured in Mexico and other countries.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks relating to our business Our business is cyclical and future periods of decline and increased demand are not predictable. The electronic component industry is highly cyclical and experiences periods of decline from time to time.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks relating to our business Our business is cyclical and future periods of decline and increased demand are not predictable.
If such opportunities were to arise, our Board of Directors may consider the potentially dilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders, and may therefore be reluctant to authorize the issuance of additional shares.
If such opportunities were to arise, our Board of Directors may consider the potentially dilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders, and may therefore be reluctant to authorize the issuance of additional shares. Any such reluctance could impede our ability to complete certain transactions.
In connection with the pricing of, and the initial purchasers’ exercise in full of their option to purchase additional, 2030 Notes, we entered into capped call transactions with the option counterparties.
The capped call transactions may affect the market price of our common stock. In connection with the pricing of, and the initial purchasers’ exercise in full of their option to purchase additional, 2030 Notes, we entered into capped call transactions with the option counterparties.
Also, if an acquired business fails to operate as anticipated, cannot be successfully integrated with our other businesses, or we cannot effectively mitigate the assumed, contingent, and unknown liabilities acquired, our results of operations, financial condition, enterprise value, market value, and prospects could all be materially adversely affected.
Also, if an acquired business fails to operate as anticipated, cannot be successfully integrated with our other businesses, or we cannot effectively mitigate the assumed, contingent, and unknown liabilities acquired, our results of operations, financial condition, enterprise value, market value, and prospects could all be materially adversely affected. 17 To remain successful, we must continue to innovate, and our investments in new technologies may not prove successful.
Any such reluctance could impede our ability to complete certain transactions. 20 Our outstanding convertible debt instruments may impact the trading price of our common stock. We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertible arbitrage strategy with respect to these instruments.
Our outstanding convertible debt instruments may impact the trading price of our common stock. We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertible arbitrage strategy with respect to these instruments.
Our business may be adversely affected by the widespread outbreak of diseases and the mitigation efforts by governments worldwide to control their spread. We cannot predict when future disease outbreaks or pandemics will occur.
For this reason, we expect to have some level of future restructuring expenses due to acquisitions. Our business may be adversely affected by the widespread outbreak of diseases and the mitigation efforts by governments worldwide to control their spread. We cannot predict when future disease outbreaks or pandemics will occur.
In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. 23 Certain provisions in the indentures governing the 2025 Notes and 2030 Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us.
Our capacity expansion plans include building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab , a new power inductor site in Mexico, a resistor manufacturing expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy.
Our capacity expansion plans include the expansion of the recently acquired Newport wafer fab, building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab , a new site in Mexico for power inductors and non-linear resistors, a resistor manufacturing expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy.
The voting rights of the holders of our Class B common stock effectively give such holders the ability to prevent transactions that would result in a change in control of us, including transactions in which holders of our common stock might otherwise receive a premium for their shares over the then-current market price.
The voting rights of the holders of our Class B common stock effectively give such holders the ability to prevent transactions that would result in a change in control of us, including transactions in which holders of our common stock might otherwise receive a premium for their shares over the then-current market price. 22 Our acquisition strategy could be impeded if our Board of Directors were reluctant to authorize the issuance of substantial additional shares.
The risks include, but are not limited to, the following: • design and construction delays and cost overruns; • issues installing and qualifying new equipment and ramping production; • poor production process yields and reduced quality control; and • insufficient personnel with requisite expertise and experience to operate the facilities.
The risks include, but are not limited to, the following: • design and construction delays and cost overruns; • issues installing and qualifying new equipment and ramping production; • poor production process yields and reduced quality control; and • insufficient personnel with requisite expertise and experience to operate the facilities. 16 We have incurred, and may in the future incur, restructuring costs and associated asset write-downs.
For example, if a takeover would constitute a fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash. In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection with such takeover.
In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection with such takeover.
Such effects could result in us being required to record impairment charges related to our property and equipment, intangible assets, or goodwill. 15 In the past we have grown through successful integration of acquired businesses, but this may not continue.
Such effects could result in us being required to record impairment charges related to our property and equipment, intangible assets, or goodwill. In the past we have grown through successful integration of acquired businesses, but this may not continue. Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of expansion through acquisitions.
To remain successful, we must continue to innovate, and our investments in new technologies may not prove successful. Our future operating results are dependent on our ability to continually develop, introduce, and market new and innovative products, to modify existing products, to respond to technological change, and to customize certain products to meet customer requirements.
Our future operating results are dependent on our ability to continually develop, introduce, and market new and innovative products, to modify existing products, to respond to technological change, and to customize certain products to meet customer requirements.
Our credit facility bears interest at variable rates based on Secured Overnight Financing Rate ("SOFR") and other currency-specific reference rates. A significant increase in such reference rates would significantly increase our interest expense.
Our credit facility bears interest at variable rates based on Secured Overnight Financing Rate ("SOFR") and other currency-specific reference rates. A significant increase in such reference rates would significantly increase our interest expense. A general increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investment balances.
The conditional conversion feature of our outstanding 2025 Notes and 2030 Notes, if triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the 2025 Notes or 2030 Notes is triggered, holders of such notes will be entitled to convert the notes at any time during specified periods at their option.
In the event the conditional conversion feature of the 2030 Notes is triggered, holders of such notes will be entitled to convert the notes at any time during specified periods at their option.
Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. Our agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require us to recognize losses on these adverse purchase commitments.
Our agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require us to recognize losses on these adverse purchase commitments.
Protection of intellectual property often involves complex legal and factual issues. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies are covered by valid and enforceable patents or are effectively maintained as trade secrets.
We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies are covered by valid and enforceable patents or are effectively maintained as trade secrets. We have applied, and will continue to apply, for patents covering our technologies and products, as we deem appropriate.
Our production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources could require us to reduce production or incur additional costs. We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication and the assembly and testing of finished goods.
Our production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources could require us to reduce production or incur additional costs.
C apacity that we add during upturns in the business cycle may result in excess capacity during periods when demand for our products recede, resulting in inefficient use of capital which could also adversely affect us.
Capacity that we add during upturns in the business cycle may result in excess capacity during periods when demand for our products recede, resulting in inefficient use of capital which could also adversely affect us. A downturn in our business in general, or isolated to a particular sector, could require us to incur restructuring and severance charges and/or asset write-downs.
Our acquisition strategy could be impeded if our Board of Directors were reluctant to authorize the issuance of substantial additional shares. Our overall long-term business strategy has historically included a strong focus on acquisitions financed alternatively through cash on hand or the incurrence of indebtedness.
Our overall long-term business strategy has historically included a strong focus on acquisitions financed alternatively through cash on hand or the incurrence of indebtedness.
The termination of a government contract as a result of any of these acts could have a negative impact on our results of operations and financial condition and could have a negative impact on our reputation and ability to procure other government contracts in the future. 18 We have qualified certain of our products under various military specifications approved and monitored by the United States Defense Electronic Supply Center and under certain European military specifications.
The termination of a government contract as a result of any of these acts could have a negative impact on our results of operations and financial condition and could have a negative impact on our reputation and ability to procure other government contracts in the future.
Most of our operating cash is generated by our non-U.S. subsidiaries, and our U.S. parent company and U.S. subsidiaries have significant payment obligations. We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2023, 65.5% of our cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States.
Most of our operating cash is generated by our non-U.S. subsidiaries, and our U.S. parent company and U.S. subsidiaries have significant payment obligations. We generate a significant amount of cash and profits from our non-U.S. subsidiaries.
The rapid consolidation that our industry has experienced may further decrease our ability to identify attractive opportunities for acquisition. We are subject to various U.S. and foreign competition laws and regulations that may affect our ability to complete certain acquisitions.
We are subject to various U.S. and foreign competition laws and regulations that may affect our ability to complete certain acquisitions.
Despite our best efforts, there can be no assurances we will be successful in mitigating these risks and if we are unable to do so, they may have material negative impacts on our business and results of operations. 16 Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology and to operate our business without infringing or violating the intellectual property rights of others.
Despite our best efforts, there can be no assurances we will be successful in mitigating these risks and if we are unable to do so, they may have material negative impacts on our business and results of operations.
Our revolving credit facility provides us with additional U.S. liquidity. U.S. tax obligations, cash dividends to stockholders, share repurchases, additional convertible debt repurchases, and principal and interest payments on our debt instruments need to be paid by our U.S. parent company, Vishay Intertechnology, Inc.
U.S. tax obligations, cash dividends to stockholders, share repurchases, additional convertible debt repurchases, and principal and interest payments on our debt instruments need to be paid by our U.S. parent company, Vishay Intertechnology, Inc. A U.S.-domiciled subsidiary is funding the expansion and operations of the Newport wafer fabrication facility. Our U.S. subsidiaries have other operating cash needs.
We have applied, and will continue to apply, for patents covering our technologies and products, as we deem appropriate. However, our applications may not result in issued patents. Also, our existing patents and any future patents may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products.
However, our applications may not result in issued patents. Also, our existing patents and any future patents may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. Others may independently develop similar or alternative technologies, design around our patented technologies, or may challenge or seek to invalidate our patents.
Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of expansion through acquisitions. Despite our plan to continue to grow, in part, through targeted acquisitions, we may be unable to continue to identify, have the financial capabilities to acquire, or successfully complete transactions with suitable acquisition candidates.
Despite our plan to continue to grow, in part, through targeted acquisitions, we may be unable to continue to identify, have the financial capabilities to acquire, or successfully complete transactions with suitable acquisition candidates. The rapid consolidation that our industry has experienced may further decrease our ability to identify attractive opportunities for acquisition.
Certain provisions in the indentures governing the 2025 Notes and 2030 Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us. Certain provisions in the 2025 Notes and 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us.
Certain provisions in the 2025 Notes and 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us. For example, if a takeover would constitute a fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash.
Certain of our historical investments in start-up companies have not succeeded, and there can be no assurance that our current and future investments in start-up enterprises will prove successful. Our business and our results of operations are sensitive to supply chain disruptions.
Certain of our historical investments in start-up companies have not succeeded, and there can be no assurance that our current and future investments in start-up enterprises will prove successful. Potential investments in artificial intelligence may not be successful, which could adversely affect our business, reputation, or financial results. We are evaluating investments in A.I. initiatives, including generative A.I.
In addition, customers purchasing components from us have rights to indemnification under certain circumstances if such components violate the intellectual property rights of others. Further, we have observed that in the current business environment, electronic component and semiconductor companies have become more aggressive in asserting and defending patent claims against competitors.
Further, we have observed that in the current business environment, electronic component and semiconductor companies have become more aggressive in asserting and defending patent claims against competitors. We will continue to vigorously defend our intellectual property rights, and may become party to disputes regarding patent licensing and cross patent licensing.
We and others in the electronic components industry have experienced these conditions in the recent past and cannot predict when we may experience downturns in the future.
We and others in the electronic components industry have experienced these conditions in the recent past and cannot predict when we may experience downturns in the future. If demand falls below customers' forecasts or if customers do not control their inventory effectively, customers may significantly and abruptly reduce their demand, or even cancel orders.
As part of our strategy to drive growth and increase capacity, we are increasing internal capacity by investing $329 million in 2023 and plan to invest $1.2 billion total from 2023 to 2025 and plan to increase external capacity by outsourcing additional commodity products to subcontractors.
We face significant challenges managing our capacity expansion strategy. As part of our strategy to drive growth and increase capacity to assure customers of reliable volume as they scale, we are increasing internal capacity by heavily investing in capital expenditures, and plan to increase external capacity by outsourcing additional commodity products to subcontractors.
Litigation regarding patent and other intellectual property rights is prevalent in the electronic components industry, particularly the discrete semiconductor sector. We have on occasion been notified that we may be infringing on patent and other intellectual property rights of others.
We have on occasion been notified that we may be infringing on patent and other intellectual property rights of others. In addition, customers purchasing components from us have rights to indemnification under certain circumstances if such components violate the intellectual property rights of others.
If we were to undertake an acquisition for equity, the acquisition may have a dilutive effect on the interests of the holders of our common stock. Regulatory and compliance related risks Future changes in our environmental liability and compliance obligations may harm our ability to operate or increase our costs.
If we were to undertake an acquisition for equity, the acquisition may have a dilutive effect on the interests of the holders of our common stock. We may experience significant variability in our quarterly and annual effective tax rate which would affect our reported net income.
Others may independently develop similar or alternative technologies, design around our patented technologies, or may challenge or seek to invalidate our patents. Also, the legal system in certain countries in which we operate may not provide or may not continue to provide sufficient, intellectual property legal protections and remedies.
Also, the legal system in certain countries in which we operate may not provide or may not continue to provide sufficient, intellectual property legal protections and remedies. Litigation regarding patent and other intellectual property rights is prevalent in the electronic components industry, particularly the discrete semiconductor sector.
These declines in demand are usually driven by market conditions in the end markets for our products, but may also result from distributors not appropriately managing their inventory levels. We may also experience intense demand for our products in periods of a rising economy and we may have difficulty expanding our manufacturing capacity to satisfy demand during such periods.
We may also experience intense demand for our products in periods of a rising economy and we may have difficulty expanding our manufacturing capacity to satisfy demand during such periods. We may not be able to purchase sufficient supplies, allocate sufficient manufacturing capacity, hire skilled personnel, or expand our facilities to meet such increases in demand.
Removed
Market conditions, such as during a decline in product demand on a global basis, could result in order cancellations and deferrals, lower average selling prices, and a material and adverse impact on our results of operations.
Added
We make significant decisions, including order acceptance, production schedules, personnel needs, material purchases, and other resource requirements, based on customer forecasts and estimates of customer requirements. The electronic component industry is highly cyclical and experiences periods of decline from time to time.
Removed
Factors which could limit such expansion include delays in procurement of manufacturing equipment, shortages of skilled personnel, and physical constraints on expansion of our facilities.
Added
Orders for materials purchases from certain suppliers may include noncancellable purchase commitments or advance payments from us, and those obligations and commitments could reduce our ability to adjust our inventory or expense levels to reflect declining market demands.
Removed
A downturn in our business in general, or isolated to a particular sector, could require us to incur restructuring and severance charges and/or asset write-downs. We face significant challenges managing our capacity expansion strategy.
Added
Because certain of our sales, research and development, and internal manufacturing overhead expenses are relatively fixed, a reduction in customer demand likely would decrease our gross margins and operating income. Unexpected declines in customer demands can also result in lower average selling prices and additional expenses.
Removed
Additionally, the planned transaction with Nexperia BV will add a wafer fabrication facility and operations in Newport, South Wales, U.K. There is no assurance that we will be able to close the transaction for the Nexperia wafer fabrication facility. There are demand-related risks associated with all growth initiatives.
Added
Rapid customer ramp-up and significant increases in demand may strain our resources or negatively affect our margins. Inability to satisfy customer demand in a timely manner may harm our reputation, reduce our other opportunities, damage our relationships with customers, reduce our market share, reduce revenue growth, and/or cause us to incur contractual penalties.
Removed
We will continue to vigorously defend our intellectual property rights, and may become party to disputes regarding patent licensing and cross patent licensing.
Added
To remain competitive, particularly when business conditions are difficult, or to implement organizational change, we sometimes implement restructuring programs. The programs attempt to reduce our cost structure by achieving synergies, eliminating redundant facilities and staff positions, and moving operations, where possible, to jurisdictions with lower labor costs.
Removed
A general increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investment balances, which are currently greater than our debt balances.
Added
In 2024, we announced a restructuring program that primarily focuses on optimizing our manufacturing footprint and streamlining business decision making.
Removed
A U.S.-domiciled subsidiary is expected to be the acquiring entity of Nexperia's wafer fabrication facility and operations in Newport, South Wales, U.K. Our U.S. subsidiaries have other operating cash needs.
Added
Additionally, our long-term strategy includes growing through the integration of acquired businesses, and GAAP requires plant closure and employee termination costs that we incur in connection with our acquisition activities to be recorded as expenses in our consolidated statement of operations, as such expenses are incurred.
Added
There are significant risks involved in developing and deploying A.I., and there can be no assurance that the usage of A.I. will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
Added
For example, our A.I.-related efforts, particularly those related to generative A.I., subject us to risk related to harmful content, inaccuracies, bias, discrimination, toxicity, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, and sanctions and export controls, among others. It is also uncertain how various laws will apply to content generated by A.I.
Added
We are subject to risks of new or enhanced governmental or regulatory scrutiny, litigation, or other legal liability, ethical concerns, negative consumer perceptions as to automation and A.I., or other complications that could adversely affect our business, reputation, or financial results.
Added
As a result of the complexity and rapid development of A.I., it is the subject of evolving review by various U.S. governmental and regulatory agencies, and other foreign jurisdictions are applying, or are considering applying, their intellectual property, cybersecurity, data protection and other laws to A.I. and/or are considering general legal frameworks on A.I.
Added
We may not always be able to anticipate how to respond to these frameworks, given that they are still rapidly evolving. We may also have to expend resources to adjust our use of A.I. in certain jurisdictions if the legal frameworks on A.I. are not consistent across jurisdictions.
Added
As such, it is not possible to predict all of the risks related to the use of A.I., and changes in laws, rules, directives, and regulations governing the use of A.I. may adversely affect our ability to develop and use A.I. or subject us to legal liability. Our business and our results of operations are sensitive to supply chain disruptions.
Added
We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication, the assembly and testing of finished goods, and the manufacturing of certain commodity products. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited.
Added
Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology and to operate our business without infringing or violating the intellectual property rights of others. Protection of intellectual property often involves complex legal and factual issues.
Added
We operate in a global environment with significant operations in various locations outside the United States. Our effective income tax rate is the result of the income tax rates in the various locations where we operate. Our mix of income and losses in these locations affects our effective tax rate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed14 unchanged
These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to the Audit Committee on any appropriate items. 24
These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to the Audit Committee on any appropriate items. 26

Item 2. Properties

Properties — owned and leased real estate

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Klagenfurt, Austria Capacitors 150,000 People’s Republic of China Danshui Capacitors, Inductors, and Resistors 446,000 Shanghai MOSFETs 300,000 Shatian Capacitors and Resistors 218,000 Zhuhai Inductors 179,000 Long Xi Resistors 36,000 Santo Domingo, Dominican Republic Inductors 44,000 Germany Itzehoe MOSFETs 217,000 Heilbronn Diodes and Optoelectronic Components 163,000 Selb Capacitors 47,000 Mumbai, India Diodes 34,000 Mexico Juarez Resistors 314,000 Durango Inductors 200,000 Mexicali Resistors 15,000 Manila, Philippines Optoelectronic Components 149,000 Kaohsiung, Republic of China (Taiwan) Diodes 130,000 26
Klagenfurt, Austria Capacitors 150,000 People’s Republic of China Danshui Capacitors, Inductors, and Resistors 446,000 Shanghai MOSFETs 300,000 Shatian Capacitors and Resistors 218,000 Zhuhai Inductors 179,000 Long Xi Resistors 36,000 Santo Domingo, Dominican Republic Inductors 44,000 Germany Itzehoe MOSFETs 217,000 Heilbronn Diodes and Optoelectronic Components 163,000 Selb Capacitors 47,000 Mumbai, India Diodes 34,000 Mexico Juarez Resistors 314,000 Durango Inductors and Resistors 200,000 Mexicali Resistors 15,000 Manila, Philippines Optoelectronic Components 149,000 Kaohsiung, Republic of China (Taiwan) Diodes 130,000 28
Available Space (Square Feet) United States Columbus, NE Resistors 87,000 Attleboro, MA Resistors 40,000 Ontario, CA Resistors 38,000 Dover, NH Inductors 35,000 East Windsor, CT Resistors 30,000 Hollis, NH Resistors 25,000 Fremont, CA Resistors 18,000 Glendale, WI Resistors 14,000 Hudson, MA Resistors 13,000 Montevideo, MN Inductors 11,000 Duluth, MN Inductors 10,000 Non-U.S.
Available Space (Square Feet) United States Columbus, NE Resistors 87,000 Attleboro, MA Resistors 40,000 Carson City, NV Resistors 40,000 Ontario, CA Resistors 38,000 Dover, NH Inductors 35,000 East Windsor, CT Resistors 30,000 Hollis, NH Resistors 25,000 Fremont, CA Resistors 18,000 Glendale, WI Resistors 14,000 Hudson, MA Resistors 13,000 Montevideo, MN Inductors 11,000 Duluth, MN Inductors 10,000 Non-U.S.
Vocklabruck, Austria Diodes 100,000 People's Republic of China Tianjin Diodes 397,000 Shanghai Diodes 195,000 Xi'an MOSFETs and Diodes 133,000 Czech Republic Blatna Resistors and Capacitors 276,000 Dolni Rychnov Resistors and Capacitors 183,000 Prachatice Capacitors 92,000 Volary Resistors 35,000 France Nice Resistors 221,000 Chateau Gontier Resistors 82,000 Hyeres Resistors 59,000 Germany Selb Resistors and Capacitors 472,000 Heide Resistors 264,000 Landshut Capacitors 75,000 Fichtelberg Resistors 36,000 Budapest, Hungary Diodes 101,000 Loni, India Resistors and Capacitors 405,000 Israel Dimona Resistors and Capacitors 404,000 Migdal Ha'Emek Capacitors 288,000 Be'er Sheva Resistors, Inductors and Capacitors 276,000 Turin, Italy Diodes 102,000 Miharu, Japan Capacitors 165,000 Melaka, Malaysia Optoelectronic Components 156,000 Juarez, Mexico Resistors 75,000 Famalicao, Portugal Capacitors 222,000 Republic of China (Taiwan) Taipei Diodes 366,000 Kaohsiung MOSFETs 105,000 25 The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are as follows: Leased Locations Business Segment Approx.
Vocklabruck, Austria Diodes 100,000 People's Republic of China Tianjin Diodes 397,000 Shanghai Diodes 195,000 Xi'an Diodes 133,000 Czech Republic Blatna Resistors and Capacitors 276,000 Dolni Rychnov Resistors and Capacitors 183,000 Prachatice Capacitors 92,000 Volary Resistors 35,000 France Nice Resistors 221,000 Chateau Gontier Resistors 82,000 Hyeres Resistors 59,000 Germany Selb Resistors and Capacitors 472,000 Heide Resistors 264,000 Erndtebrueck Capacitors 94,000 Landshut Capacitors 75,000 Fichtelberg Resistors 36,000 Budapest, Hungary Diodes 101,000 Loni, India Resistors and Capacitors 405,000 Israel Dimona Resistors and Capacitors 404,000 Migdal Ha'Emek Capacitors 288,000 Be'er Sheva Resistors, Inductors and Capacitors 276,000 Turin, Italy Diodes 102,000 Miharu, Japan Capacitors 165,000 Melaka, Malaysia Optoelectronic Components 156,000 Juarez, Mexico Resistors 75,000 Famalicao, Portugal Capacitors 222,000 Republic of China (Taiwan) Taipei Diodes 366,000 Kaohsiung MOSFETs 105,000 Newport, South Wales, United Kingdom MOSFETs 439,000 27 The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are as follows: Leased Locations Business Segment Approx.
Item 2. PROPERTIES At December 31, 2023, our business had 57 manufacturing locations. Our manufacturing facilities include owned and leased locations. Some locations include both owned and leased facilities in the same location. The list of manufacturing facilities below excludes former manufacturing facilities that are not presently used for manufacturing activities.
Item 2. PROPERTIES At December 31, 2024, our business had 60 manufacturing locations. Our manufacturing facilities include owned and leased locations. Some locations include both owned and leased facilities in the same location. The list of manufacturing facilities below excludes former manufacturing facilities that are not presently used for manufacturing activities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

5 edited+1 added−6 removed5 unchanged
The two remaining cases contain claims for recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), and allege that a predecessor’s manufacturing operations in Hicksville, New York (the “Site”), between 1960 and 1993, impacted groundwater beneath and downgradient of the Site.
These cases contain claims for recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), and allege that a predecessor’s manufacturing operations in Hicksville, New York (the “Site”), between 1960 and 1993, impacted groundwater beneath and downgradient of the Site.
The groundwater beneath and downgradient of the Site is part of the New Cassel/Hicksville Groundwater Contamination Site, which was added to the National Priorities List pursuant to CERCLA on September 15, 2011. The Company is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims.
The groundwater beneath and downgradient of the Site is part of the New Cassel/Hicksville Groundwater Contamination Site, which was added to the National Priorities List pursuant to CERCLA on September 15, 2011.
(“VGSI”), a wholly owned subsidiary of the Company, is a direct defendant in two separate, but related, litigation matters: (1) 101 Frost Street Associates, L.P. v. United States Department of Energy et al .; and (2) Hicksville Water District v. United States Department of Energy, et al .
(“VGSI”), a wholly owned subsidiary of the Company, was a direct defendant in two separate, but related, litigation matters previously pending in the United States District Court for the Eastern District of New York: (1) Hicksville Water District v. United States Department of Energy, et al.; and (2) Hicksville Water District v. Alsy Manufacturing, Inc.
As with two other previously reported cases pending in the United States District Court for the Eastern District of New York, the newest case contains claims for recovery of response costs under CERCLA, and alleges that a predecessor’s manufacturing operations in the Site, between 1960 and 1993, impacted groundwater beneath and downgradient of the Site.
The remaining case contains claims for recovery of response costs under CERCLA, and alleges that a predecessor’s manufacturing operations in the Site, between 1960 and 1993, impacted groundwater beneath and downgradient of the Site. VGSI is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims.
The two remaining cases are pending in the United States District Court for the Eastern District of New York.
VGSI remains a defendant in one remaining case, 101 Frost Street Associates, L.P. v. United States Department of Energy et al., pending before the United States District Court for the Eastern District of New York.
Removed
VGSI was also a third-party defendant in a third related matter, United States v Island Transportation Corp. et al. On September 12, 2022, the United States District Court for the Eastern District of New York dismissed all third-party complaints commenced by Island Transportation Corp. against nineteen third-party defendants including VGSI.
Added
VGSI and the Hicksville Water District reached a comprehensive settlement of both cases brought by the Hicksville Water District that resolves all past and future claims, known and unknown. Vishay admitted no liability and agreed to pay the Hicksville Water District $3 million. The settlement was approved by the court and both cases were dismissed in late July 2024.
Removed
VGSI was served in August 2023 with a complaint brought by the Hicksville Water District against multiple defendants. The matter, Hicksville Water District v. Alsy Manufacturing, Inc., is pending in the Supreme Court of the State of New York, County of Nassau.
Removed
VGSI is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims. On August 31, 2023, Vishay was notified by the U.S. Environmental Protection Agency ("EPA") of potential violations of the Resource Conservation and Recovery Act and the Solid Waste Disposal Act.
Removed
The alleged violations relate to the handling, storage, inspection, and labeling of hazardous waste at Vishay's facility located in Columbus, Nebraska.
Removed
Vishay has reached an agreement with the EPA, subject to execution of and finalization of the Consent Agreement, including the filing and ratification of the Consent Agreement, including the filing and ratification of the Consent Agreement by the Regional Hearing Clerk for EPA, Region 7, to settle this matter for a civil penalty of $387,000 and committing to submit quarterly compliance reports to the EPA for one year.
Removed
Vishay admits no violation of any law or regulation under the agreement. The Company does not expect the matter or its settlement as proposed to have a material effect on its financial condition or results of operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

9 edited+0 added−1 removed3 unchanged
Zandman controls, on a shared basis with Ruta Zandman and Ziv Shoshani, approximately 35.0% of the total voting power of our capital stock as of December 31, 2023. He also serves on the Board of Directors of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from Vishay Intertechnology in 2010 (including as non-executive Chair from 2010 - 2022).
Zandman controls, on a shared basis with Ruta Zandman and Ziv Shoshani, approximately 35% of the total voting power of our capital stock as of December 31, 2024. He also serves on the Board of Directors of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from Vishay Intertechnology in 2010 (including as non-executive Chair from 2010 - 2022).
O'Sullivan worked as an in-house corporate attorney for a subsidiary of Koch Industries, Inc., and in private practice at DLA Piper. 28 PART II
O'Sullivan worked as an in-house corporate attorney for a subsidiary of Koch Industries, Inc., and in private practice at DLA Piper. 30 PART II
Michael O'Sullivan was appointed Executive Vice President - Chief Administrative and Legal Officer effective January 1, 2024. Mr. O’Sullivan previously served as Corporate General Counsel since joining the Company in 2012. In July 2016, Mr. O'Sullivan was appointed Regional Country Manager - The Americas. Prior to joining Vishay, Mr.
Henrici has been responsible for corporate communications since 2005. Michael O'Sullivan was appointed Executive Vice President - Chief Administrative and Legal Officer effective January 1, 2024. Mr. O’Sullivan previously served as Corporate General Counsel since joining the Company in 2012. In July 2016, Mr. O'Sullivan was appointed Regional Country Manager - The Americas. Prior to joining Vishay, Mr.
Item 4. MINE SAFETY DISCLOSURES None. 27 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information regarding our executive officers as of February 16, 2024: Name Age Positions Held Marc Zandman* 62 Executive Chairman of the Board, Chief Business Development Officer, and President, Vishay Israel Ltd.
Item 4. MINE SAFETY DISCLOSURES None. 29 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information regarding our executive officers as of February 14, 2025: Name Age Positions Held Marc Zandman* 63 Executive Chairman of the Board, Chief Business Development Officer, and President, Vishay Israel Ltd.
Shoshani has held various positions of increasing responsibility since joining Vishay in 2004, including Deputy to the Chief Technical Officer (2021-2022), Vice President Integrated Circuits Division (2009-2022), and Vice President R&D – Semiconductors (2019-2021). Prior to joining Vishay, Mr. Shoshani worked for Harmonic. Mr. Shoshani’s experience with Vishay includes divisional leadership roles in R&D, marketing, business development and operations.
Shoshani has held various positions of increasing responsibility since joining Vishay in 2004, including Executive Vice President – Chief Technical Officer (2023-2025), Deputy to the Chief Technical Officer (2021-2022), Vice President Integrated Circuits Division (2009-2022), and Vice President R&D – Semiconductors (2019-2021). Prior to joining Vishay, Mr. Shoshani worked for Harmonic. Mr.
Peter Henrici was appointed Executive Vice President – Corporate Development effective January 1, 2023 and has served as Corporate Secretary since 2012. Mr. Henrici has held various positions in marketing communications, investor relations, and corporate treasury departments since joining Vishay in 1998. Mr. Henrici has been responsible for corporate communications since 2005.
Shoshani’s experience with Vishay includes divisional leadership roles in R&D, marketing, business development and operations. Peter Henrici was appointed Executive Vice President – Corporate Development effective January 1, 2023 and has served as Corporate Secretary since 2012. Mr. Henrici has held various positions in marketing communications, investor relations, and corporate treasury departments since joining Vishay in 1998. Mr.
Joel Smejkal* 57 Chief Executive Officer, President, and Director Lori Lipcaman 66 Executive Vice President and Chief Financial Officer Jeff Webster 53 Executive Vice President - Chief Operating Officer Roy Shoshani 50 Executive Vice President - Chief Technical Officer Peter Henrici 68 Executive Vice President - Corporate Development Michael O'Sullivan 49 Executive Vice President - Chief Administrative and Legal Officer * Member of the Executive Committee of the Board of Directors.
Joel Smejkal* 58 Chief Executive Officer, President, and Director David McConnell 58 Executive Vice President and Chief Financial Officer Roy Shoshani 51 Executive Vice President - Chief Operating Officer - Semiconductors and Chief Technical Officer Peter Henrici 69 Executive Vice President - Corporate Development Michael O'Sullivan 50 Executive Vice President - Chief Administrative and Legal Officer * Member of the Executive Committee of the Board of Directors.
His experience with Vishay includes worldwide and divisional leadership roles in engineering, marketing, operations, and sales. Lori Lipcaman was appointed Executive Vice President and Chief Financial Officer of the Company effective September 1, 2011. Ms. Lipcaman had been appointed Executive Vice President Finance and Chief Accounting Officer in September 2008.
His experience with Vishay includes worldwide and divisional leadership roles in engineering, marketing, operations, and sales. David McConnell was appointed Executive Vice President and Chief Financial Officer of the Company effective March 1, 2024. Mr.
Webster served as Executive Vice President, Business Head Passive Components from 2020-2022. He has held various positions of increasing responsibility since joining Vishay in 2000, including Senior Vice President Global Quality (2014-2019) and Vice President Global Quality – Actives (2000-2014). Roy Shoshani was appointed Executive Vice President – Chief Technical Officer effective January 1, 2023. Mr.
McConnell has held various positions of increasing responsibility since joining Vishay in 1992, including Senior Vice President - Corporate Treasurer and Risk Management from 2016-2024, and responsibility for corporate treasury since 2011. Roy Shoshani was appointed Executive Vice President – Chief Operating Officer – Semiconductors and Chief Technical Officer effective January 13, 2025. Mr.
Removed
Previously, she served as Vishay’s Corporate Senior Vice President, Operations Controller, from March 1998 to September 2008. Prior to that, she served in various positions of increasing responsibility in finance and controlling since joining the Company in May 1989. Jeff Webster was appointed Executive Vice President - Chief Operating Officer effective January 1, 2023. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+3 added−2 removed8 unchanged
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors) approximately 89.7% of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023.
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors) approximately 89.7% of our Class B common stock and 44.4% of the total voting power of our capital stock as of December 31, 2024.
The following table sets forth the high and low sales prices for our common stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters. Holders of record of our common stock totaled approximately 1,000 at February 14, 2024.
The following table sets forth the high and low sales prices for our common stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters. Holders of record of our common stock totaled approximately 1,000 at February 12, 2025.
The line graph assumes that $100 had been invested at December 31, 2018 and assumes that all dividends were reinvested.
The line graph assumes that $100 had been invested at December 31, 2019 and assumes that all dividends were reinvested.
As of September 30, 2023, approximately 1.3 million shares remained from the previous repurchase authorization of 6.0 million shares. On November 28, 2023, Vishay's Board of Directors approved the repurchase of an additional 2.5 million shares of common stock, to enable the operation of the Stockholder Return Policy for the foreseeable future.
As of September 28, 2024, approximately 1.2 million shares remained from the previous repurchase authorization of 8.5 million shares. On December 3, 2024, Vishay's Board of Directors approved the repurchase of an additional 3.0 million shares of common stock, to enable the operation of the Stockholder Return Policy for the foreseeable future.
We paid $55.6 million of dividends to stockholders and repurchased $78.7 million of our stock pursuant to the Stockholder Return Policy in 2023. To enable the operation of the Stockholder Return Policy, Vishay's Board of Directors approves the repurchase of a stated number of shares of common stock from time-to-time.
We paid $54.7 million of dividends to stockholders and repurchased $50.4 million of our stock pursuant to the Stockholder Return Policy in 2024. To enable the operation of the Stockholder Return Policy, Vishay's Board of Directors approves the repurchase of a stated number of shares of common stock from time-to-time.
Common stock price range Dividends declared 2023 2022 per share High Low High Low 2023 2022 Fourth quarter $ 25.22 $ 21.15 $ 23.39 $ 17.63 $ 0.10 $ 0.10 Third quarter $ 30.10 $ 24.03 $ 21.58 $ 16.73 $ 0.10 $ 0.10 Second quarter $ 29.66 $ 20.57 $ 20.91 $ 17.13 $ 0.10 $ 0.10 First quarter $ 24.48 $ 20.51 $ 22.71 $ 17.58 $ 0.10 $ 0.10 At February 14, 2024, we had outstanding 12,097,148 shares of Class B common stock, par value $.10 per share, each of which entitles the holder to ten votes.
Common stock price range Dividends declared 2024 2023 per share High Low High Low 2024 2023 Fourth quarter $ 20.15 $ 14.95 $ 25.22 $ 21.15 $ 0.10 $ 0.10 Third quarter $ 24.69 $ 17.42 $ 30.10 $ 24.03 $ 0.10 $ 0.10 Second quarter $ 24.19 $ 20.83 $ 29.66 $ 20.57 $ 0.10 $ 0.10 First quarter $ 23.92 $ 20.93 $ 24.48 $ 20.51 $ 0.10 $ 0.10 At February 12, 2025, we had outstanding 12,097,148 shares of Class B common stock, par value $0.10 per share, each of which entitles the holder to ten votes.
Removed
The following table provides information regarding repurchases of our common stock during the fiscal quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share (including commission) Total Number of Shares Purchased as Part of Publicly Announced Program Total Dollar Amount Purchased Under the Program Maximum Number of Shares that May Yet Be Purchased Under the Program October 1 - October 28 254,985 $ 23.92 254,985 $ 6,099,333 1,023,839 October 29 - November 25 309,914 22.63 309,914 7,013,513 713,925 November 26 - December 31 336,540 23.50 336,540 7,910,080 2,877,385 Total 901,439 $ 23.32 901,439 $ 21,022,926 2,877,385 29 Stock Performance Graph The line graph below compares the cumulative total stockholder return on Vishay’s common stock over a 5-year period with the returns on the Standard & Poor’s MidCap 400 Stock Index (of which Vishay is a component), the Standard & Poor’s 500 Stock Index, and the Philadelphia Semiconductor Index.
Added
The following table provides information regarding repurchases of our common stock during the fiscal quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share (including commission) Total Number of Shares Purchased as Part of Publicly Announced Program Total Dollar Amount Purchased Under the Program Maximum Number of Shares that May Yet Be Purchased Under the Program September 29 - October 26 479,969 $ 18.19 479,969 $ 8,728,358 700,084 October 27 - November 23 220,413 17.67 220,413 3,893,706 479,671 November 24 - December 31 - - - - 3,479,671 Total 700,382 $ 18.02 700,382 $ 12,622,064 3,479,671 In the fourth fiscal quarter of 2024, we repurchased $53.2 million of our convertible senior notes due 2025.
Removed
Base Years Ending December 31, Period Company Name / Index 2018 2019 2020 2021 2022 2023 Vishay Intertechnology, Inc. 100 120.66 120.03 128.98 129.84 146.67 S&P 500 Index 100 131.49 155.68 200.37 164.08 207.21 S&P MidCap 400 Index 100 126.20 143.44 178.95 155.58 181.15 Philadelphia Semiconductor Index 100 163.26 250.87 358.37 233.37 389.74
Added
The aggregate purchase price for the repurchases was $53.4 million. 31 Stock Performance Graph The line graph below compares the cumulative total stockholder return on Vishay’s common stock over a 5-year period with the returns on the Standard & Poor’s MidCap 400 Stock Index, the Standard & Poor's SmallCap 600 Index (of which Vishay is a component), the Standard & Poor’s 500 Stock Index, and the Philadelphia Semiconductor Index.
Added
Base Years Ending December 31, Period Company Name / Index 2019 2020 2021 2022 2023 2024 Vishay Intertechnology, Inc. 100 99.48 106.90 107.61 121.56 87.59 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 S&P MidCap 400 Index 100 113.66 141.80 123.28 143.54 163.54 S&P SmallCap 600 Index 100 111.29 141.13 118.41 137.42 149.37 Philadelphia Semiconductor Index 100 153.66 219.51 142.94 238.72 287.31

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The revolving credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming our pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma net leverage ratio is greater than 2.50 to 1.00).
The credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming our pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma net leverage ratio is greater than 2.50 to 1.00).
We define adjusted net earnings as net earnings determined in accordance with GAAP adjusted for various items that management believes are not indicative of the intrinsic operating performance of our business. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and equipment.
We define adjusted net earnings as net earnings (loss) determined in accordance with GAAP adjusted for various items that management believes are not indicative of the intrinsic operating performance of our business. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and equipment.
We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our revolving credit facility. We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs.
We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our credit facility. We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs.
As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt). 54 The interest rates on our short-term investments vary by location.
As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt). The interest rates on our short-term investments vary by location.
The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. 35 Financial Metrics We utilize several financial metrics to evaluate the performance and assess the future direction of our business.
The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. 36 Financial Metrics We utilize several financial metrics to evaluate the performance and assess the future direction of our business.
However, if economic conditions change or if our investment strategy changes, we may be inclined to change some of our assumptions, and the resulting change could have a material impact on the consolidated statements of operations and on the consolidated balance sheet. 43 Income Taxes We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
However, if economic conditions change or if our investment strategy changes, we may be inclined to change some of our assumptions, and the resulting change could have a material impact on the consolidated statements of operations and on the consolidated balance sheet. 45 Income Taxes We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
Our specialty passive components are more resistant to average selling price erosion. All pricing is subject to governing market conditions and is independently set by us. 36 The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business.
Our specialty passive components are more resistant to average selling price erosion. All pricing is subject to governing market conditions and is independently set by us. 37 The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business.
We made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany are no longer indefinitely reinvested. We recorded additional tax expense during the fourth fiscal quarter of 2022 to accrue the $59.6 million of withholding taxes necessary to distribute these approximately $360.0 million of accumulated earnings to the United States.
We made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany were no longer indefinitely reinvested. We recorded additional tax expense during the fourth fiscal quarter of 2022 to accrue the $59.6 million of withholding taxes necessary to distribute these approximately $360.0 million of accumulated earnings to the United States.
The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2022). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination.
The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2023). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination.
Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution. During 2023, certain tax examinations were concluded and certain statutes of limitations lapsed. Our tax provision for those years includes adjustments related to the resolution of these matters.
Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution. During 2024, certain tax examinations were concluded and certain statutes of limitations lapsed. Our tax provision for those years includes adjustments related to the resolution of these matters.
Operating margin is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs. Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment operating income.
Operating margin is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs. Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment gross profit and segment operating income.
Dollar as the Functional Currency Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars.
Dollar as the Functional Currency Our operations in Israel, the United Kingdom, and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars.
The cost of products sold and selling, general, and administrative expense have been favorably impacted for the year ended December 31, 2023 compared to 2022 and for the year ended December 31, 2022 compared to 2021 by local currency transactions of subsidiaries which use the U.S. dollar as their functional currency.
The cost of products sold and selling, general, and administrative expense have been favorably impacted for the year ended December 31, 2024 compared to 2023 and for the year ended December 31, 2023 compared to 2022 by local currency transactions of subsidiaries which use the U.S. dollar as their functional currency.
See Item 7A for additional discussion of foreign currency exchange risk. 41 Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number of policies that entail significant judgments or estimates.
See Item 7A for additional discussion of foreign currency exchange risk. 43 Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number of policies that entail significant judgments or estimates.
The increase is primarily due to increased sales to EMS customers, medical, automotive, and military and aerospace end market customers, and customers in the Americas and Europe regions, partially offset by decreased sales to distribution customers, industrial and telecommunications end market customers, and customers in the Asia region. The gross profit margin increased versus the prior year.
The increase is primarily due to increased sales to EMS customers, medical, and military and aerospace end market customers, and customers in the Americas and Asia regions, partially offset by decreased sales to industrial and automotive end market customers and customers in the Europe region. The gross profit margin decreased versus the prior year.
For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchase commitments, see Notes 2, 4, 5, 6, 11, and 13 to our consolidated financial statements. 57
For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchase commitments, see Notes 2, 4, 5, 6, 11, and 13 to our consolidated financial statements. 59
These initiatives are the foundation for our ambitions to unleash the potential at Vishay, realizing the full value of our broad product portfolio and becoming a customer-first company, and for our goals of driving top line growth, expanding margins and optimizing returns. . 34 Stockholder Return Policy In 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis.
These Vishay 3.0 initiatives are the foundation for our ambitions to unleash the potential at Vishay, realizing the full value of our broad product portfolio and becoming a customer-first company, and for our goals of driving top line growth, expanding margins and optimizing returns. 35 Stockholder Return Policy In 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis.
Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December 31, 2023. We include the current portion of the long-term liabilities in the table above.
Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December 31, 2024. We include the current portion of the long-term liabilities in the table above.
We have seen and will continue to see an increase in operating expenses over the next couple of years as we add these engineering talents, fill gaps in our technology, and become a preferred supplier to more customers and more broadly sell our product portfolio.
We have seen and expect to continue to see an increase in operating expenses over the next couple of years as we add engineering talents, fill gaps in our technology, and become a preferred supplier to more customers and more broadly sell our product portfolio.
Segment operating income would also exclude costs not routinely used in the management of the segments in periods when those items are present, such as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items affecting comparability.
Segment operating income would also exclude costs not routinely used in the management of the segments in periods when those items are present, such as restructuring and severance costs, goodwill impairment charges, the direct impact of the COVID-19 pandemic, and other items affecting comparability.
Beginning in late 2024 and into 2025, we expect to be in a better position to capture the next step in the growing demand for electrification in our key end-markets. To focus this growth, we have identified product lines for growth across each reportable segment Most of these product lines serve multiple end-market segments, applications, and business channels.
Beginning in early 2025, we expect to be in a better position to capture the next step in the growing demand for electrification in our key end-markets. To focus this growth, we have identified product lines for growth across each reportable segment. Most of these product lines serve multiple end-market segments, applications, and business channels.
For these purposes, we calculate pro forma EBITDA as the adjusted EBITDA of Vishay and the target for Vishay’s four preceding fiscal quarters, with a pro forma adjustment for savings which management estimates would have been achieved had the target been acquired by Vishay at the beginning of the four fiscal quarter period.
For these purposes, we calculate pro forma EBITDA as the adjusted EBITDA of Vishay and the target for the trailing four fiscal quarters, with a pro forma adjustment for savings which management estimates would have been achieved had the target been acquired by Vishay at the beginning of the trailing four fiscal quarters.
Cash flows provided by operating activities were $365.7 million for the year ended December 31, 2023, as compared to cash flows provided by operations of $484.3 million for the year ended December 31, 2022. In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle.
Cash flows provided by operating activities were $173.7 million for the year ended December 31, 2024, as compared to cash flows provided by operations of $365.7 million for the year ended December 31, 2023. In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle.
These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in the industries in which we compete; the discount rate; terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures.
These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in the industries in which we compete; the discount rate; terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization (components of earnings before interest, taxes, depreciation, and amortization, "EBITDA"); and capital expenditures.
We have begun building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% within 2-3 years and allow us to balance our in-house and foundry wafer supply.
We have begun building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% by 2028 and allow us to balance our in-house and foundry wafer supply.
We settled an examination of our U.S. federal income tax returns for the periods ended December 31, 2017 through 2019. Our federal income tax returns for subsequent years remain subject to examination.
During 2023, we settled an examination of our U.S. federal income tax returns for the periods ended December 31, 2017 through 2019. Our federal income tax returns for the years 2021 through 2023 remain subject to examination.
Our free cash results were significantly impacted by the installment payments of the U.S. transition tax of $27.7 million in 2023 and $14.8 million in 2022 and 2021, respectively, and $63.6 million and $25.2 million of payments of foreign, withholding, and claw-back cash taxes on foreign earnings for the $276.8 million and $81.2 million (net of taxes) that were repatriated to the U.S. in 2023 and 2022, respectively . 33 Growth and Company Transformation Initiatives Effective January 1, 2023, a new executive leadership team, promoted from within, embarked on a new era at Vishay.
Our free cash results were significantly impacted by the installment payments of the U.S. transition tax of $37.6 million in 2024, $27.7 million in 2023, and $14.8 million in 2022, respectively, and payments of foreign, withholding, and claw-back cash taxes of $15.0 million in 2024, $63.6 million in 2023, and $25.2 million in 2022 on foreign earnings of $105.0 million, $276.8 million, and $81.2 million (net of taxes) that were repatriated to the U.S. in 2024, 2023, and 2022, respectively. 34 Growth and Company Transformation Initiatives Effective January 1, 2023, a new executive leadership team, promoted from within, embarked on a new era at Vishay ("Vishay 3.0").
See Notes 1 and 5 to consolidated financial statements for additional information. 44 Results of Operations Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2023 2022 2021 Costs of products sold 71.4 % 69.7 % 72.6 % Gross profit 28.6 % 30.3 % 27.4 % Selling, general, and administrative expenses 14.4 % 12.7 % 13.0 % Operating income 14.3 % 17.6 % 14.4 % Income before taxes and noncontrolling interest 13.7 % 17.0 % 13.4 % Net earnings attributable to Vishay stockholders 9.5 % 12.3 % 9.2 % ________ Effective tax rate 30.4 % 27.5 % 31.2 % Net Revenues Net revenues were as follows (dollars in thousands) : 2023 2022 2021 Net revenues $ 3,402,045 $ 3,497,401 $ 3,240,487 Change versus prior year $ (95,356 ) $ 256,914 Percentage change versus prior year (2.7 )% 7.9 % Changes in net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (5.2 )% 4.3 % Increase in average selling prices 1.7 % 7.2 % Foreign currency effects 0.7 % (4.0 )% Acquisitions 0.2 % 0.4 % Other (0.1 )% 0.0 % Net change (2.7 )% 7.9 % Despite the inventory correction that we are experiencing, the long-term prospects for our business remain favorable, and we continue to increase manufacturing capacities for critical product lines.
See Notes 1 and 5 to consolidated financial statements for additional information. 46 Results of Operations Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2024 2023 2022 Costs of products sold 78.7 % 71.4 % 69.7 % Gross profit 21.3 % 28.6 % 30.3 % Selling, general, and administrative expenses 17.5 % 14.4 % 12.7 % Operating income 0.2 % 14.3 % 17.6 % Income (loss) before taxes and noncontrolling interest (0.1 )% 13.7 % 17.0 % Net earnings (loss) attributable to Vishay stockholders (1.1 )% 9.5 % 12.3 % ________ Effective tax rate (1,145.5 )% 30.4 % 27.5 % Net Revenues Net revenues were as follows (dollars in thousands) : 2024 2023 2022 Net revenues $ 2,937,587 $ 3,402,045 $ 3,497,401 Change versus prior year $ (464,458 ) $ (95,356) Percentage change versus prior year (13.7 )% (2.7 )% Changes in net revenues were attributable to the following: 2024 vs. 2023 2023 vs. 2022 Change attributable to: Decrease in volume (10.9 )% (5.2 )% Change in average selling prices (4.2 )% 1.7 % Foreign currency effects 0.0 % 0.7 % Acquisitions 1.0 % 0.2 % Other 0.4 % (0.1 )% Net change (13.7 )% (2.7 )% Despite the inventory correction that we are experiencing, the long-term prospects for our business remain favorable, and we continue to increase manufacturing capacities for critical product lines.
The changes in these indefinite reinvestment assertions will provide greater access to our worldwide cash balances to fund our growth plan and our Stockholder Return Policy, but also increased our effective tax rate. The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders.
These indefinite reinvestment assertions provide greater access to our worldwide cash balances to fund our growth plan and our Stockholder Return Policy, but also negatively impact our effective tax rate. The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders.
The 2023 Plan is the first broad-based stock compensation program at Vishay in over 20 years. This program increased operating expenses by $8.8 million in 2023 and is expected to increase operating expenses by between $7 million and $10 million in 2024 versus 2023.
The 2023 Plan is the first broad-based stock compensation program at Vishay in over 20 years. This program increased operating expenses by $5.1 million in 2024 versus 2023 and is expected to increase operating expenses by between $4 million and $7 million in 2025 versus 2024.
Higher labor, materials, and utilities costs also negatively impacted the gross profit margin. 45 Segments Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments.
Higher labor costs and depreciation expense also negatively impacted the gross profit margin. 47 Segments Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments.
We continue to broaden our business with targeted acquisitions of specialty resistors businesses. 49 Inductors Net revenues of the Inductors segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 347,392 $ 331,086 $ 335,638 Change versus comparable prior year period $ 16,306 $ (4,552 ) Percentage change versus comparable prior year period 4.9 % (1.4 )% Changes in Inductors segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume 2.4 % (0.8 )% Increase in average selling prices 1.9 % 1.2 % Foreign currency effects 0.5 % (1.8 )% Other 0.1 % 0.0 % Net change 4.9 % (1.4 )% Gross profit margins and segment operating margins for the Inductors segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 32.4 % 31.5 % 32.0 % Segment operating margin 28.7 % 28.2 % 29.0 % Net revenues of the Inductors segment increased moderately versus the prior year.
We continue to broaden our business with targeted acquisitions of specialty resistors businesses. 51 Inductors Net revenues of the Inductors segment were as follows (dollars in thousands): Years ended December 31, 2024 2023 2022 Net revenues $ 356,355 $ 347,392 $ 331,086 Change versus comparable prior year period $ 8,963 $ 16,306 Percentage change versus comparable prior year period 2.6 % 4.9 % Changes in Inductors segment net revenues were attributable to the following: 2024 vs. 2023 2023 vs. 2022 Change attributable to: Increase in volume 4.8 % 2.4 % Change in average selling prices (2.2 )% 1.9 % Foreign currency effects 0.0 % 0.5 % Other 0.0 % 0.1 % Net change 2.6 % 4.9 % Gross profit margins and segment operating margins for the Inductors segment were as follows: Years ended December 31, 2024 2023 2022 Gross profit margin 30.0 % 32.4 % 31.5 % Segment operating margin 25.9 % 28.7 % 28.2 % Net revenues of the Inductors segment increased slightly versus the prior year.
To drive growth and optimize stockholder value, we plan to capitalize on the mega trends of e-mobility, sustainability, and connectivity through initiatives. We are developing go-to-market strategies and investing in and expanding the key product lines for growth that we have identified.
To drive growth and optimize stockholder value, we plan to capitalize on the mega trends of e-mobility, sustainability, and connectivity through initiatives. We are developing go-to-market strategies and investing in and expanding the key product lines for growth that we have identified. In addition, we are strategically expanding our outsourced production of commodity products to subcontractors.
The decrease in net revenues in 2023 is primarily sales volume-driven, partially offset by increased average selling prices. The increase in net revenues in 2022 was primarily due to increased sales volume and average selling prices.
The decrease in net revenues in 2024 is primarily due to lower sales volume and decreased average selling prices. The decrease in net revenues in 2023 was primarily sales volume-driven, partially offset by increased average selling prices.
Pursuant to the indenture governing the convertible senior notes due 2030, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in cash or shares of our common stock. We intend to finance the principal amount of any converted senior notes due 2030 using borrowings under our credit facility.
Pursuant to the indenture governing the convertible senior notes due 2030, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in cash or shares of our common stock.
The decrease is primarily due to decreased sales to distribution and EMS customers and customers in the Americas and Asia regions, partially offset by increased sales to industrial end market customers. The gross profit margin increased versus the prior year.
The decrease is primarily due to decreased sales to distribution customers, customers in the industrial and automotive end markets, and customers in the Americas and Europe regions, partially offset by increased sales to customers in the Asia region. The gross profit margin decreased slightly versus the prior year.
The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $93.3 million and the highest amount outstanding on our revolving credit facility at a fiscal month end was $185 million during the year ended December 31, 2023.
The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $34 million and the highest amount outstanding at a fiscal month end was $136 million during the fiscal year ended December 31, 2024.
Direct costs of the COVID-19 pandemic are not allocated to the segments as the chief operating decision maker's evaluation of segment performance does not include these costs (in thousands) : Years ended December 31, 2023 2022 2021 MOSFETS $ 259,386 $ 274,498 $ 189,959 Diodes 175,621 198,105 168,365 Optoelectronic Components 62,226 102,787 100,737 Resistors 238,428 262,072 215,853 Inductors 112,414 104,349 107,358 Capacitors 126,418 123,839 105,641 Unallocated gross profit (loss) - (6,661 ) - Gross profit $ 974,493 $ 1,058,989 $ 887,913 Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item on the face of our consolidated statements of cash flows prepared in accordance with GAAP.
Direct costs of the COVID-19 pandemic are not allocated to the segments as the chief operating decision maker's evaluation of segment performance does not include these costs (in thousands) : Years ended December 31, 2024 2023 2022 MOSFETS $ 87,101 $ 259,386 $ 274,498 Diodes 121,162 175,621 198,105 Optoelectronic Components 38,252 62,226 102,787 Resistors 158,958 238,428 262,072 Inductors 107,080 112,414 104,349 Capacitors 113,739 126,418 123,839 Unallocated gross profit (loss) - - (6,661 ) Gross profit $ 626,292 $ 974,493 $ 1,058,989 Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item on the face of our consolidated statements of cash flows prepared in accordance with GAAP.
See further discussion in “Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. The key financial metrics decreased in the fourth fiscal quarter of 2023 primarily due to the negative impacts of an on-going distributor inventory correction that resulted in lower orders. Net revenues and margins decreased versus the prior year period primarily due to lower volume.
See further discussion in “Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. The key financial metrics decreased in the fourth fiscal quarter of 2024 primarily due to the negative impacts of an on-going distributor inventory correction that resulted in lower orders.
Average selling prices increased versus the prior year. 47 O ptoelectronic Components Net revenues of the Optoelectronic Components segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 243,146 $ 296,384 $ 302,714 Change versus comparable prior year period $ (53,238 ) $ (6,330 ) Percentage change versus comparable prior year period (18.0 )% (2.1 )% Changes in Optoelectronic Components segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Decrease in volume (19.2 )% (3.6 )% Increase in average selling prices 0.5 % 6.7 % Foreign currency effects 0.9 % (4.7 )% Other (0.2 )% (0.5 )% Net change (18.0 )% (2.1 )% Gross profit margins and segment operating margins for the Optoelectronic Components segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 25.6 % 34.7 % 33.3 % Segment operating margin 17.7 % 28.8 % 27.2 % Net revenues of the Optoelectronic Components segment decreased significantly versus the prior year.
Average selling prices decreased versus the prior year. 49 O ptoelectronic Components Net revenues of the Optoelectronic Components segment were as follows (dollars in thousands): Years ended December 31, 2024 2023 2022 Net revenues $ 212,368 $ 243,146 $ 296,384 Change versus comparable prior year period $ (30,778 ) $ (53,238 ) Percentage change versus comparable prior year period (12.7 )% (18.0 )% Changes in Optoelectronic Components segment net revenues were attributable to the following: 2024 vs. 2023 2023 vs. 2022 Change attributable to: Decrease in volume (10.5 )% (19.2 )% Change in average selling prices (2.5 )% 0.5 % Foreign currency effects 0.1 % 0.9 % Other 0.2 % (0.2 )% Net change (12.7 )% (18.0 )% Gross profit margins and segment operating margins for the Optoelectronic Components segment were as follows: Years ended December 31, 2024 2023 2022 Gross profit margin 18.0 % 25.6 % 34.7 % Segment operating margin 7.9 % 17.7 % 28.8 % Net revenues of the Optoelectronic Components segment decreased versus the prior year.
See additional information regarding our competitive strengths and key challenges as disclosed in Part I. 31 We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business.
We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business.
The cash generated from operations is used to fund our capital expenditure plans, and cash in excess of our capital expenditure needs is available to fund our acquisition strategy, to reduce debt levels, and to pay dividends and repurchase stock.
The cash generated from operations is used to fund our capital expenditure plans, and cash in excess of our capital expenditure needs is available to fund our acquisition strategy, fund our stockholder return policy, and to reduce debt levels.
Gross profit margin decreased versus the prior year primarily due to lower sales volume and higher materials, labor, and fixed costs, partially offset by higher average selling prices. Segment operating margin decreased versus the prior year primarily due to decreased gross profit.
The decrease is due to lower sales volume, decreased average selling prices, and higher labor and materials costs, partially offset by a favorable product mix and decreased utilities costs. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices decreased versus the prior year.
MOSFETs Net revenues of the MOSFETs segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 778,754 $ 762,260 $ 667,998 Change versus comparable prior year period $ 16,494 $ 94,262 Percentage change versus comparable prior year period 2.2 % 14.1 % Changes in MOSFETs segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (1.8 )% 4.1 % Increase in average selling prices 2.3 % 11.8 % Foreign currency effects 0.5 % (2.4 )% Acquisition 1.0 % 0.1 % Other 0.2 % 0.5 % Net change 2.2 % 14.1 % Gross profit margins and segment operating margins for the MOSFETs segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 33.3 % 36.0 % 28.4 % Segment operating margin 25.1 % 30.0 % 22.3 % Net revenues of the MOSFETs segment increased slightly in 2023 versus the prior year.
MOSFETs Net revenues of the MOSFETs segment were as follows (dollars in thousands): Years ended December 31, 2024 2023 2022 Net revenues $ 601,979 $ 778,754 $ 762,260 Change versus comparable prior year period $ (176,775 ) $ 16,494 Percentage change versus comparable prior year period (22.7 )% 2.2 % Changes in MOSFETs segment net revenues were attributable to the following: 2024 vs. 2023 2023 vs. 2022 Change attributable to: Decrease in volume (17.4 )% (1.8 )% Change in average selling prices (11.0 )% 2.3 % Foreign currency effects 0.0 % 0.5 % Acquisition 3.9 % 1.0 % Other 1.8 % 0.2 % Net change (22.7 )% 2.2 % Gross profit margins and segment operating margins for the MOSFETs segment were as follows: Years ended December 31, 2024 2023 2022 Gross profit margin 14.5 % 33.3 % 36.0 % Segment operating margin 1.1 % 25.1 % 30.0 % Net revenues of the MOSFETs segment decreased significantly in 2024 versus the prior year.
Additional information about income taxes is included in Note 5 to our consolidated financial statements. 53 Financial Condition, Liquidity, and Capital Resources Our financial condition as of December 31, 2023 continued to be strong. Cash and short-term investments exceed our long-term debt balances, and we have historically been a strong generator of operating cash flows.
Additional information about income taxes is included in Note 5 to our consolidated financial statements. 55 Financial Condition, Liquidity, and Capital Resources Our financial condition as of December 31, 2024 continued to be strong. We have historically been a strong generator of operating cash flows.
Net earnings attributable to Vishay stockholders for the year ended December 31, 2023 were $323.8 million, or $2.31 per diluted share, compared to $428.8 million, or $2.98 per diluted share, and $298.0 million, or $2.05 per share, for the years ended December 31, 2022 and 2021, respectively.
The net loss attributable to Vishay stockholders for the year ended December 31, 2024 was $(31.2) million, or $(0.23) per share, compared to net earnings of $323.8 million, or $2.31 per diluted share, and $428.8 million, or $2.98 per diluted share, for the years ended December 31, 2023 and 2022, respectively.
We also pay a commitment fee, also based on our total leverage ratio, on undrawn amounts. U.S. dollar borrowings under the revolving credit agreement are based on SOFR (including a customary spread adjustment). Borrowings in foreign currencies bear interest at currency-specific reference rates plus an interest margin.
Borrowings under the credit facility bear interest at variable reference rates plus an interest margin. The applicable interest margin is based on our total leverage ratio. We also pay a commitment fee, also based on our total leverage ratio, on undrawn amounts. U.S. dollar borrowings under the credit facility are based on SOFR (including a customary spread adjustment).
Cash paid for property and equipment for the year ended December 31, 2023 was $329.4 million, as compared to $325.3 million for the year ended December 31, 2022.
Cash paid for property and equipment for the year ended December 31, 2024 was $320.1 million, as compared to $329.4 million for the year ended December 31, 2023.
The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands): Years ended December 31, 2023 2022 Change Foreign exchange gain (loss) $ 677 $ 5,690 $ (5,013 ) Interest income 31,353 7,560 23,793 Other components of net periodic pension expense (8,730 ) (11,090 ) 2,360 Investment income (loss) 1,347 (6,812 ) 8,159 Other 616 (200 ) 816 $ 25,263 $ (4,852 ) $ 30,115 2022 Compared to 2021 Interest expense for the year ended December 31, 2022 decreased by $ 0.4 million versus the year ended December 31, 2021.
The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands): Years ended December 31, 2023 2022 Change Foreign exchange gain $ 677 $ 5,690 $ (5,013 ) Interest income 31,353 7,560 23,793 Other components of net periodic pension expense (8,730 ) (11,090 ) 2,360 Investment income (loss) 1,347 (6,812 ) 8,159 Other 616 (200 ) 816 $ 25,263 $ (4,852 ) $ 30,115 54 Income Taxes For the years ended December 31, 2024, 2023, and 2022, the effective tax rates were (1,145.5)%, 30.4%, and 27.5%, respectively.
The items affecting comparability are (in thousands, except per share amounts) : Years ended December 31, 2023 2022 2021 GAAP net earnings attributable to Vishay stockholders $ 323,820 $ 428,810 $ 297,970 Reconciling items affecting gross profit: Impact of COVID-19 pandemic $ - $ 6,661 $ - Other reconciling items affecting operating income: Impact of COVID-19 pandemic $ - $ 546 $ - Reconciling items affecting other income (expense): Loss on early extinguishment of debt $ 18,874 $ - $ - Reconciling items affecting tax expense (benefit): Effects of changes in uncertain tax positions $ - $ (5,941 ) $ - Effects of changes in valuation allowances - (33,669 ) (5,714 ) Effect of change in indefinite reversal assertion - 59,642 - Change in tax laws and regulations - - 45,040 Tax effects of pre-tax items above (498 ) (1,802 ) - Adjusted net earnings $ 342,196 $ 454,247 $ 337,296 Adjusted weighted average diluted shares outstanding 140,246 143,915 145,495 Adjusted earnings per diluted share $ 2.44 $ 3.16 $ 2.32 32 The following table reconciles gross profit by segment to consolidated gross profit.
The items affecting comparability are (in thousands, except per share amounts) : Years ended December 31, 2024 2023 2022 GAAP net earnings (loss) attributable to Vishay stockholders $ (31,150 ) $ 323,820 $ 428,810 Reconciling items affecting gross profit: Impact of COVID-19 pandemic $ - $ - $ 6,661 Other reconciling items affecting operating income: Impairment of goodwill $ 66,487 $ - $ - Restructuring and severance costs 40,614 - - Impact of COVID-19 pandemic - - 546 Reconciling items affecting other income (expense): Loss on early extinguishment of debt $ - $ 18,874 $ - Reconciling items affecting tax expense (benefit): Effects of changes in uncertain tax positions $ - $ - $ (5,941 ) Effects of changes in valuation allowances - - (33,669 ) Effect of change in indefinite reversal assertion - - 59,642 Tax effects of pre-tax items above (10,299 ) (498 ) (1,802 ) Adjusted net earnings $ 65,652 $ 342,196 $ 454,247 Adjusted weighted average diluted shares outstanding 137,741 140,246 145,495 Adjusted earnings per diluted share $ 0.48 $ 2.44 $ 3.16 The following table reconciles gross profit by segment to consolidated gross profit.
This measure should not be viewed as an alternative to GAAP measures of performance or liquidity. However, management believes that an analysis of "net cash and short-term investments (debt)" assists investors in understanding aspects of our cash and debt management. The measure, as calculated by us, may not be comparable to similarly titled measures used by other companies.
This measure should not be viewed as an alternative to GAAP measures of performance or liquidity. However, management believes that an analysis of "net cash and short-term investments (debt)" assists investors in understanding aspects of our cash and debt management.
At the same time, we are enhancing our channel management while investing in internal resources by adding customer-facing engineers and filling gaps in technology and market coverage. Taken together, each of these initiatives supports our Think Customer First organizational culture.
At the same time, we are enhancing our channel management while investing in internal resources by adding customer-facing engineers and filling gaps in technology and market coverage. Taken together, each of these initiatives supports our Think Customer First organizational structure. To increase our internal capacity, we had planned to invest approximately $435 million in 2024.
The segment operating margin decreased versus the prior year primarily due to decreased gross profit. Increased segment SG&A expenses primarily due to acquisition-related expenses also contributed to the decrease. Average selling prices increased versus the prior year. We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines.
The segment operating margin decreased versus the prior year. The decreases are primarily due to gross profit margin decreases and increased segment SG&A expenses associated with the Newport wafer fab. Average selling prices decreased versus the prior year. We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines.
The dollar was weaker during 2023 versus 2022, but stronger during 2022 versus 2021, with the translation of foreign currency revenues and expenses into U.S. dollars increasing reported revenues and expenses in 2023 versus 2022, but decreasing reported revenues and expenses in 2022 versus 2021. Foreign Subsidiaries which use the U.S.
The net change of the dollar was not material when comparing 2024 versus 2023, but the dollar was weaker during 2023 versus 2022, with the translation of foreign currency revenues and expenses into U.S. dollars increasing reported revenues and expenses in 2023 versus 2022. Foreign Subsidiaries which use the U.S.
Our revenues are dependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets.
Our business and operating results have been and will continue to be impacted by worldwide economic conditions. Our revenues are dependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets.
Even as we seek to manage our costs, we remain cognizant of the future requirements of our demanding markets. We continue to pursue our growth plans through investing in capacities for strategic product lines, and through increasing our resources for R&D, technical marketing, and field application engineering; supplemented by opportunistic acquisitions of specialty businesses.
We continue to pursue our growth plans through investing in capacities for strategic product lines, and through increasing our resources for R&D, technical marketing, and field application engineering; supplemented by opportunistic acquisitions of specialty businesses.
The increase was primarily due to increased sales to military and aerospace, automotive, and industrial end market customers and customers in the Europe region, partially offset by decreased sales to distribution customers. The gross profit margin decreased versus the prior year.
The decrease was primarily due to decreased sales to distribution customers and customers in the industrial and automotive end markets. Sales decreased in the Europe and Americas regions, partially offset by an increase in sales in the Asia region. The gross profit margin decreased versus the prior year.
The year 2023 is generally seen as the staging year for this plan, and all elements of the plan are progressing throughout the organization. In 2024, we expect to advance many of these initiatives and begin to have increased manufacturing capacity available.
The year 2023 was generally seen as the staging year for this plan, and all elements of the plan have progressed throughout the organization. In 2024, many of these initiatives advanced and increased manufacturing capacity was available.
Gross Profit and Margins Gross profit margins for the year ended December 31, 2023 were 28.6%, as compared to 30.3% for the year ended December 31, 2022. The decrease in gross profit margin is primarily due to decreased sales volume.
Gross Profit and Margins Gross profit margins for the year ended December 31, 2024 were 21.3%, as compared to 28.6% for the year ended December 31, 2023. The decrease in gross profit margin is primarily due to lower sales volume, decreased average selling prices, and the impact of the Newport acquisition.
Over a period of many years, we have generally maintained a contributive margin of between 45% and 47% of revenues. The erosion of average selling prices, particularly of our semiconductor products, that is typical of our industry, and inflation negatively impact contributive margin and drive us to continually seek ways to reduce our variable costs.
The erosion of average selling prices, particularly of our semiconductor products, that is typical of our industry, and inflation negatively impact contributive margin and drive us to continually seek ways to reduce our variable costs.
We intend to finance the principal amount of any converted notes using borrowings under our credit facility. No conversions have occurred to date. 56 In evaluating our liquidity and capital resources, we consider our outstanding commitments.
We intend to finance the principal amount of any converted notes using borrowings under our credit facility. No conversions have occurred to date.
We have developed go-to market strategies for each one of these product lines, concentrating our resources on improving the technical performance of non-commodity and custom products, to better position Vishay to support the mega trends toward electrification and data communications.
We have developed go-to market strategies for each one of these product lines, concentrating our resources on improving the technical performance of certified and custom products, to better position Vishay to support the mega trends toward electrification and data communications. See the eight strategic levers being used to achieve our goals in "Key Business Strategies" in Item 1.
Revenues decreased versus the fourth fiscal quarter of 2022 and versus the prior fiscal quarter primarily due to lower sales volume. The book-to-bill ratio and backlog were negatively impacted by the distributor inventory correction that began in 2022 and continued through 2023. We continue to increase manufacturing capacity for critical product lines.
Revenues decreased versus the fourth fiscal quarter of 2023 and versus the prior fiscal quarter primarily due to lower sales volume and lower average selling prices. The book-to-bill ratio increased versus the prior fiscal quarter, but orders backlog were negatively impacted by the distributor inventory correction that began in 2022 and continued through 2024.
The following table summarizes activity pursuant to this policy (in thousands): Years ended December 31, 2023 December 31, 2022 Dividends paid to stockholders $ 55,626 $ 57,187 Stock repurchases 78,684 82,972 Total $ 134,310 $ 140,159 During the fourth quarters of 2022 and 2021, we determined that substantially all unremitted foreign earnings in Germany and Israel, respectively, are no longer indefinitely reinvested.
The following table summarizes activity pursuant to this policy (in thousands): Years ended December 31, 2024 December 31, 2023 Dividends paid to stockholders $ 54,672 $ 55,626 Stock repurchases 50,406 78,684 Total $ 105,078 $ 134,310 We have determined that substantially all unremitted foreign earnings in Germany and Israel are no longer indefinitely reinvested.
The decrease is primarily due to lower sales volume, higher materials, services, labor, and utilities costs, and inventory and higher depreciation expense. The segment operating margin decreased primarily due to the decrease in gross profit. Average selling prices increased versus the prior year.
The decrease is primarily due to lower average selling prices and higher logistics and labor costs. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices decreased versus the prior year.
Our free cash results are as follows (in thousands) : Years ended December 31, 2023 2022 2021 Net cash provided by continuing operating activities $ 365,703 $ 484,288 $ 457,104 Proceeds from sale of property and equipment 1,156 1,198 1,317 Less: Capital expenditures (329,410 ) (325,308 ) (218,372 ) Free cash $ 37,449 $ 160,178 $ 240,049 Orders are lower due to a distributor inventory correction that began in the fourth fiscal quarter of 2022 and continued throughout 2023.
Our free cash results are as follows (in thousands) : Years ended December 31, 2024 2023 2022 Net cash provided by continuing operating activities $ 173,702 $ 365,703 $ 484,288 Proceeds from sale of property and equipment 3,015 1,156 1,198 Less: Capital expenditures (320,079 ) (329,410 ) (325,308 ) Free cash $ (143,362 ) $ 37,449 $ 160,178 Orders are lower due to a distributor inventory correction that took longer than expected and continued through 2024.
The following table summarizes the components of net cash and short-term investments (debt) (in thousands) : December 31, 2023 December 31, 2022 Credit facility $ - $ 42,000 Convertible senior notes, due 2025 95,102 465,344 Convertible senior notes, due 2030 750,000 - Deferred financing costs (26,914 ) (6,407 ) Total debt 818,188 500,937 Cash and cash equivalents 972,719 610,825 Short-term investments 35,808 305,272 Net cash and short-term investments (debt) $ 190,339 $ 415,160 "Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP.
The following table summarizes the components of net cash and short-term investments (debt) (in thousands) : December 31, 2024 December 31, 2023 Credit facility $ 136,000 $ - Convertible senior notes, due 2025 41,911 95,102 Convertible senior notes, due 2030 750,000 750,000 Deferred financing costs (22,892 ) (26,914 ) Total debt 905,019 818,188 Cash and cash equivalents 590,286 972,719 Short-term investments 16,130 35,808 Net cash and short-term investments (debt) $ (298,603 ) $ 190,339 "Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP.
We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we classify as short-term investments on our consolidated balance sheets.
The measure, as calculated by us, may not be comparable to similarly titled measures used by other companies. 56 We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we classify as short-term investments on our consolidated balance sheets.
Average selling prices decreased versus the fourth fiscal quarter of 2022 and prior fiscal quarter. Gross profit margin decreased versus the prior fiscal quarter and prior year quarter primarily due to lower volume.
We continue to increase manufacturing capacity for critical product lines. Average selling prices decreased versus the fourth fiscal quarter of 2023 and prior fiscal quarter. Gross profit margin decreased versus the prior fiscal quarter and prior year quarter primarily due to lower volume and decreased average selling prices.
We had $42 million outstanding on our revolving credit facility at December 31, 2022 and no amounts outstanding at December 31, 2023. We borrowed $501 million and repaid $543 million on the revolving credit facility during the year ended December 31, 2023.
We had no amount outstanding on our revolving credit facility at December 31, 2023 and $136 million outstanding at December 31, 2024. We borrowed $183 million and repaid $47 million on the revolving credit facility during the fiscal year ended December 31, 2024.
Accordingly, the capitalized deferred financing costs associated with our convertible notes are excluded from the calculation of long-term debt commitments in the table above. Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement and include fees under our revolving credit facility, which expires on May 8, 2028.
Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement and include fees under our revolving credit facility, which expires on May 8, 2028. Commitments for interest payments on long-term debt exclude non-cash interest expense related to the amortization of deferred financing costs.
The following table presents the components of our cash conversion cycle during the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023: 4th Quarter 2022 1st Quarter 2023 2nd Quarter 2023 3rd Quarter 2023 4th Quarter 2023 Days sales outstanding ("DSO") (a) 45 45 46 48 50 Days inventory outstanding ("DIO") (b) 93 98 94 96 101 Days payable outstanding ("DPO") (c) (31 ) (32 ) (32 ) (33 ) (31 ) Cash conversion cycle 107 111 108 111 120 a) DSO measures the average collection period of our receivables.
The following table presents the components of our cash conversion cycle during the five fiscal quarters beginning with the fourth fiscal quarter of 2023 through the fourth fiscal quarter of 2024: 4th Quarter 2023 1st Quarter 2024 2nd Quarter 2024 3rd Quarter 2024 4th Quarter 2024 Days sales outstanding ("DSO") (a) 50 51 51 53 53 Days inventory outstanding ("DIO") (b) 101 104 105 106 109 Days payable outstanding ("DPO") (c) (31 ) (31 ) (31 ) (32 ) (34 ) Cash conversion cycle 120 124 125 127 128 a) DSO measures the average collection period of our receivables.
("MaxPower"), acquired in 2022, and key niche suppliers to vertically integrate our supply chain, such as Centerline Technologies, LLC, acquired in 2023. To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization (“EBITDA”).
To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization (“EBITDA”).
The decrease is due to lower sales volume, higher labor and materials costs, and other inflationary impacts, partially offset by increased average selling prices, lower metals and logistics costs, and favorable exchange rate impacts. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices increased versus the prior year.
The decrease is due to lower sales volume, decreased average selling prices, higher labor and tantalum costs, partially offset by a favorable product mix, and decreased utilities costs. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices have decreased slightly versus the prior year.
Commitments for interest payments on long-term debt exclude non-cash interest expense related to the amortization of deferred financing costs. Various factors could have a material effect on the amount of future principal and interest payments. Principal and interest commitments associated with our convertible notes are based on the amounts outstanding as of December 31, 2023.
Various factors could have a material effect on the amount of future principal and interest payments. Principal and interest commitments associated with our convertible notes are based on the amounts outstanding as of December 31, 2024.
Other Income (Expense) 2023 Compared to 2022 Interest expense for the year ended December 31, 2023 increased by $8.0 million versus the year ended December 31, 2022. The increase is primarily due to higher interest rates and higher average balances outstanding on the revolving credit facility in 2023 prior to September 2023 when it was paid down to $0.
The increase is primarily due to higher interest rates and higher average balances outstanding on the revolving credit facility in 2023 prior to September 2023 when it was paid down to $0.
These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and commercialize, such as MaxPower Semiconductor, Inc.
These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise.
The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain subsidiaries; and are guaranteed by certain significant subsidiaries.
Based on our current total leverage ratio of 2.64 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 2.10% (including the applicable credit spread), and the undrawn commitment fee is 0.35% per annum. 57 The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain subsidiaries; and are guaranteed by certain significant subsidiaries.
We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany. 48 Resistors Net revenues of the Resistors segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 843,472 $ 832,806 $ 752,554 Change versus comparable prior year period $ 10,666 $ 80,252 Percentage change versus comparable prior year period 1.3 % 10.7 % Changes in Resistors segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (1.4 )% 10.4 % Increase in average selling prices 1.8 % 4.6 % Foreign currency effects 1.0 % (5.6 )% Acquisitions 0.0 % 1.5 % Other (0.1 )% (0.2 )% Net change 1.3 % 10.7 % Gross profit margins and segment operating margins for the Resistors segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 28.3 % 31.5 % 28.7 % Segment operating margin 24.8 % 28.2 % 25.4 % Net revenues of the Resistors segment increased slightly versus the prior year.
Average selling prices decreased versus the prior year. 50 Resistors Net revenues of the Resistors segment were as follows (dollars in thousands): Years ended December 31, 2024 2023 2022 Net revenues $ 725,614 $ 843,472 $ 832,806 Change versus comparable prior year period $ (117,858 ) $ 10,666 Percentage change versus comparable prior year period (14.0 )% 1.3 % Changes in Resistors segment net revenues were attributable to the following: 2024 vs. 2023 2023 vs. 2022 Change attributable to: Decrease in volume (12.0 )% (1.4 )% Change in average selling prices (3.0 )% 1.8 % Foreign currency effects 0.0 % 1.0 % Acquisitions 0.5 % 0.0 % Other 0.5 % (0.1 )% Net change (14.0 )% 1.3 % Gross profit margins and segment operating margins for the Resistors segment were as follows: Years ended December 31, 2024 2023 2022 Gross profit margin 21.9 % 28.3 % 31.5 % Segment operating margin 17.3 % 24.8 % 28.2 % Net revenues of the Resistors segment decreased significantly versus the prior year.
Additionally, interest commitments for our revolving credit facility are based on the rate prevailing at December 31, 2023, but actual rates are variable and are certain to change over time. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years through 2025.
Additionally, interest commitments for our revolving credit facility are based on the rate prevailing at December 31, 2024, but actual rates are variable and are certain to change over time. We will pay the final increment of the TCJA transition tax in 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+1 added−1 removed16 unchanged
Therefore, if the Israeli shekel, Czech koruna, and Chinese renminbi strengthen against all or most of our other major currencies, our operating profit is reduced. Where possible, we maintain local currency denominated cash balances in these countries approximately equal to the local currency liabilities to naturally hedge our exposures.
Therefore, if the Israeli shekel, Czech koruna, British sterling, and Chinese renminbi strengthen against all or most of our other major currencies, our operating profit is reduced. Where possible, we maintain local currency denominated cash balances in these countries approximately equal to the local currency liabilities to naturally hedge our exposures.
Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local currencies. Our exposure to foreign currency risk is mitigated to the extent that the costs incurred and the revenues earned in a particular currency offset one another.
Our operations in Israel, the United Kingdom, and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local currencies. Our exposure to foreign currency risk is mitigated to the extent that the costs incurred and the revenues earned in a particular currency offset one another.
Foreign Exchange Risk We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. We have used forward exchange contracts to economically hedge a portion of these exposures in the past. We had no outstanding forward contracts as of December 31, 2023.
Foreign Exchange Risk We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. We have used forward exchange contracts to economically hedge a portion of these exposures in the past. We had no outstanding forward contracts as of December 31, 2024.
On a selective basis, we have in the past entered into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on our outstanding variable rate debt. As of December 31, 2023, 2022, and 2021 we did not have any outstanding interest rate swap or cap agreements.
On a selective basis, we have in the past entered into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on our outstanding variable rate debt. As of December 31, 2024, 2023, and 2022 we did not have any outstanding interest rate swap or cap agreements.
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $8.5 million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals at fixed prices. 59
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $8.9 million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals at fixed prices. 61
We do not utilize derivatives or other financial instruments for trading or other speculative purposes. Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locations in Asia in local currencies.
We do not utilize derivatives or other financial instruments for trading or other speculative purposes. Our significant foreign subsidiaries are located in Germany, Israel, the United Kingdom, and Asia. We finance our operations in Europe and certain locations in Asia in local currencies.
Based on the debt and cash positions at December 31, 2023, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by approximately $3.6 million. See Note 6 to our consolidated financial statements for additional information about our long-term debt.
Based on the debt and cash positions at December 31, 2024, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by approximately $1.4 million. See Note 6 to our consolidated financial statements for additional information about our long-term debt.
Our exposure to foreign currency risk is more pronounced in Israel, the Czech Republic, and China because the percentage of expenses denominated in Israeli shekels, Czech koruna, and Chinese renminbi to total expenses is much greater than the percentage of sales denominated in Israeli shekels, Czech koruna, and Chinese renminbi to total sales.
Our exposure to foreign currency risk is more pronounced in Israel, the Czech Republic, the United Kingdom, and China because the percentage of expenses denominated in Israeli shekels, Czech koruna, British sterling and Chinese renminbi to total expenses is much greater than the percentage of sales denominated in Israeli shekels, Czech koruna, British sterling, and Chinese renminbi to total sales.
We also have a slightly higher percentage of euro-denominated sales than expenses. Therefore, when the euro strengthens against all or most of our other major currencies, our operating profit is slightly increased. Accordingly, we monitor several important cross-rates.
We also have a slightly higher percentage of euro-denominated sales than expenses. Therefore, when the euro strengthens against all or most of our other major currencies, our operating profit is slightly increased.
Our convertible debt instruments bear interest at a fixed rate, and accordingly are not subject to interest rate fluctuation risks. At December 31, 2023, we had $972.7 million of cash and cash equivalents and $35.8 million of short-term investments, which earn interest at various variable rates.
Our convertible debt instruments bear interest at a fixed rate, and accordingly are not subject to interest rate fluctuation risks. At December 31, 2024, we had $590.3 million of cash and cash equivalents and $16.1 million of short-term investments, which earn interest at various variable rates.
The interest paid on our credit facilities is based on variable reference rates and an interest margin. At December 31, 2023, we had no amounts outstanding under our revolving credit facilities. Future U.S. dollar borrowings under the revolving credit commitment will bear interest at SOFR plus 1.60%.
The interest paid on our credit facilities is based on variable reference rates and an interest margin. At December 31, 2024, we had $136 million outstanding under our revolving credit facilities. Future U.S. dollar borrowings under the revolving credit commitment will bear interest at SOFR plus 2.10%.
The acquisition price for Nexperia's Newport wafer fab is denominated in U.S. dollars. 58 We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2023, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
Accordingly, we monitor several important cross-rates. 60 We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2024, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
The foreign currency exchange rates we used were based on market rates in effect at December 31, 2023. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $15.3 million at December 31, 2023, although individual line items in our consolidated statement of operations would be materially affected.
The foreign currency exchange rates we used were based on market rates in effect at December 31, 2024. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $23.2 million at December 31, 2024.
Removed
Upon completion of the acquisition of Nexperia's Newport wafer fab, we anticipate greater exposure to British sterling, where costs incurred in British sterling are expected to exceed sales denominated in British sterling.
Added
The impact on individual line items in our consolidated statement of operations or on individual subsidiaries could be materially different.

Other VSH 10-K year-over-year comparisons