We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Vishay's 3.0 Strategy Deliver Sustainable Margin Expansion?
Read MoreHide Full Article
Key Takeaways
Vishay 3.0 aims to boost profitability through capacity expansion and higher exposure to fast-growing markets.
VSH's Q1'26 revenues rose 17.3% to $839.2M, while gross margin improved to 21%, driven by stronger volumes.
Vishay sees Q2 gross margin near 22%, helped by price increases and higher capacity utilization.
Vishay Intertechnology, Inc.'s (VSH - Free Report) Vishay 3.0 strategy is designed to improve profitability by expanding manufacturing capacity, strengthening customer relationships and increasing exposure to faster-growing markets. While the company is still investing heavily, early results suggest that the strategy is beginning to support sustainable margin expansion.
Financial results for the first quarter of 2026 reflected encouraging progress. Revenues increased 17.3% year over year to $839.2 million, beating management's guidance. Gross margin improved to 21%, up from 19.6% in the previous quarter and 19% in the year-ago quarter. Operating margin also expanded to 2.6% from 1.8% in the fourth quarter of 2025, supported by stronger shipment volumes and improved factory utilization.
Demand has strengthened across industrial, automotive, aerospace and AI-related applications. Vishay Intertechnology reported a healthy book-to-bill ratio of 1.34, including an impressive 1.47 for semiconductors. Backlog increased 21% to $1.6 billion, providing strong revenue visibility and supporting higher capacity utilization in the coming quarters.
Vishay Intertechnology expects additional margin improvement in the second quarter. Revenues are projected between $875 million and $905 million, while gross margin is expected to reach roughly 22% despite higher metals and material costs. Recently implemented price increases should also contribute more meaningfully during the second and third quarters.
Although elevated capital spending on its new German 12-inch fab and other expansion projects may pressure free cash flow in the near term, these investments position Vishay Intertechnology to benefit from future demand growth. As capacity utilization rises and pricing actions take hold, Vishay 3.0 appears well-positioned to deliver sustainable margin expansion over the long run.
How Vishay Intertechnology Compares With Key Industry Rivals
Vishay Intertechnology's closest competitors, ON Semiconductor (ON - Free Report) and Diodes Incorporated (DIOD - Free Report) , are also working to improve margins through a richer product mix and manufacturing efficiency.
ON Semiconductor continues shifting its portfolio toward higher-margin silicon carbide (SiC), intelligent power and automotive solutions. In the first quarter of 2026, the company’s non-GAAP gross margin expanded by 30 basis points sequentially to 38.5%. This was primarily driven by increased manufacturing facility utilization (reaching 77% in the first quarter), enhanced operational efficiencies under its "Fab Right" strategy, and a richer product mix favoring higher-margin intelligent power products for AI data centers and automotive applications.
Diodes is also expanding its presence in automotive, industrial and AI power management applications. The company posted first-quarter 2026 revenues of $405.5 million, up 22.1% year over year, while its gross margin improved 30 basis points to 31.8%. Sequentially, Diodes’ gross margin expanded by 70 basis points, primarily driven by increased revenue contribution from higher-margin automotive and industrial segments and improved manufacturing facility utilization rates.
VSH’s Price Performance, Valuation and Estimates
Shares of Vishay Intertechnology have skyrocketed 191.1% so far this year compared with the Zacks Computer and Technology sector’s 14.7% gain.
From a valuation standpoint, VSH trades at a forward 12-month price-to-sales ratio of 1.52, significantly below the sector average of 6.86. Vishay carries a Value Score of C.
Vishay Intertechnology Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Vishay Intertechnology’s 2026 earnings is pegged at 75 cents per share, implying a robust improvement from the loss of 5 cents in 2025. The consensus mark of $1.54 per share for 2027 earnings calls for a 105% year-over-year surge. Estimates for 2026 and 2027 have been revised upward over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Will Vishay's 3.0 Strategy Deliver Sustainable Margin Expansion?
Key Takeaways
Vishay Intertechnology, Inc.'s (VSH - Free Report) Vishay 3.0 strategy is designed to improve profitability by expanding manufacturing capacity, strengthening customer relationships and increasing exposure to faster-growing markets. While the company is still investing heavily, early results suggest that the strategy is beginning to support sustainable margin expansion.
Financial results for the first quarter of 2026 reflected encouraging progress. Revenues increased 17.3% year over year to $839.2 million, beating management's guidance. Gross margin improved to 21%, up from 19.6% in the previous quarter and 19% in the year-ago quarter. Operating margin also expanded to 2.6% from 1.8% in the fourth quarter of 2025, supported by stronger shipment volumes and improved factory utilization.
Demand has strengthened across industrial, automotive, aerospace and AI-related applications. Vishay Intertechnology reported a healthy book-to-bill ratio of 1.34, including an impressive 1.47 for semiconductors. Backlog increased 21% to $1.6 billion, providing strong revenue visibility and supporting higher capacity utilization in the coming quarters.
Vishay Intertechnology expects additional margin improvement in the second quarter. Revenues are projected between $875 million and $905 million, while gross margin is expected to reach roughly 22% despite higher metals and material costs. Recently implemented price increases should also contribute more meaningfully during the second and third quarters.
Although elevated capital spending on its new German 12-inch fab and other expansion projects may pressure free cash flow in the near term, these investments position Vishay Intertechnology to benefit from future demand growth. As capacity utilization rises and pricing actions take hold, Vishay 3.0 appears well-positioned to deliver sustainable margin expansion over the long run.
How Vishay Intertechnology Compares With Key Industry Rivals
Vishay Intertechnology's closest competitors, ON Semiconductor (ON - Free Report) and Diodes Incorporated (DIOD - Free Report) , are also working to improve margins through a richer product mix and manufacturing efficiency.
ON Semiconductor continues shifting its portfolio toward higher-margin silicon carbide (SiC), intelligent power and automotive solutions. In the first quarter of 2026, the company’s non-GAAP gross margin expanded by 30 basis points sequentially to 38.5%. This was primarily driven by increased manufacturing facility utilization (reaching 77% in the first quarter), enhanced operational efficiencies under its "Fab Right" strategy, and a richer product mix favoring higher-margin intelligent power products for AI data centers and automotive applications.
Diodes is also expanding its presence in automotive, industrial and AI power management applications. The company posted first-quarter 2026 revenues of $405.5 million, up 22.1% year over year, while its gross margin improved 30 basis points to 31.8%. Sequentially, Diodes’ gross margin expanded by 70 basis points, primarily driven by increased revenue contribution from higher-margin automotive and industrial segments and improved manufacturing facility utilization rates.
VSH’s Price Performance, Valuation and Estimates
Shares of Vishay Intertechnology have skyrocketed 191.1% so far this year compared with the Zacks Computer and Technology sector’s 14.7% gain.
Vishay Intertechnology YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, VSH trades at a forward 12-month price-to-sales ratio of 1.52, significantly below the sector average of 6.86. Vishay carries a Value Score of C.
Vishay Intertechnology Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Vishay Intertechnology’s 2026 earnings is pegged at 75 cents per share, implying a robust improvement from the loss of 5 cents in 2025. The consensus mark of $1.54 per share for 2027 earnings calls for a 105% year-over-year surge. Estimates for 2026 and 2027 have been revised upward over the past 60 days.
Image Source: Zacks Investment Research
Vishay Intertechnology currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.