VSH Q4 Deep Dive: AI, Industrial Power, and Automotive Segment Drive Momentum

Semiconductor manufacturer Vishay Intertechnology (NYSE:VSH) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 12.1% year on year to $800.9 million. Guidance for next quarter’s revenue was better than expected at $815 million at the midpoint, 1.2% above analysts’ estimates. Its non-GAAP profit of $0.01 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Vishay Intertechnology’s fourth quarter saw a positive market reaction, with management attributing growth to strong demand in industrial power and AI-related applications, as well as a recovery in automotive and distribution channels. CEO Joel Smejkal noted that “orders for the fourth quarter are at a three-year high across all main product technologies, except capacitors,” highlighting broad-based momentum. Management credited the company’s expanded capacity and customer engagement initiatives for enabling Vishay to capture new business, particularly in Asia and across high-growth segments like smart grid infrastructure and automotive electronics.

Looking ahead, management’s guidance reflects expectations for continued strength in the company’s five key growth segments: automotive electronic content, industrial power, healthcare, aerospace and defense, and AI computing. Smejkal emphasized that Vishay is “laser-focused on maintaining capacity readiness to fulfill rising demand, growing share at existing customers, reengaging lost customers, and attracting new customers.” The company’s ongoing investments in capacity, new technology releases, and expansion in high-voltage and silicon carbide products are central to its outlook for sequential revenue and margin improvement in the coming year.

Key Insights from Management’s Remarks

Management attributed the fourth quarter’s performance to broad-based demand across end markets, increased customer engagement from capacity investments, and progress in its five-year strategic plan.

• Industrial power and AI growth: Vishay saw notable increases in industrial power and AI-related power application orders, driven by smart grid infrastructure projects and growing adoption of high-voltage components for AI servers and power management. Management pointed to new customer wins in smart grid projects that extend through 2032 as a major long-term driver.

• Automotive market share gains: With expanded capacity, Vishay was able to support automotive OEMs and tier one suppliers facing component shortages, leading to new platform wins and deeper technical collaborations. Smejkal highlighted share gains in MOSFETs and diodes, noting, “We were there to support a crisis, but then they wanted to learn more about future engagement.”

• Distribution channel momentum: Revenue from distribution partners rose, especially in Asia, as customers replenished backlogs and ordered ahead of anticipated AI and automotive demand. Management cited successful cross-selling initiatives and inventory discipline contributing to the channel’s growth.

• Passives and EMS channel resurgence: Orders from Electronics Manufacturing Services (EMS) customers reached a three-year high, driven by improved lead times and increased capacity. The passives portfolio benefited from design activity in healthcare, aerospace, and industrial automation applications.

• Silicon carbide and product innovation: Vishay launched its first trench silicon carbide MOSFETs for automotive and industrial use, expanding the addressable market for next-generation electric vehicles and AI infrastructure. Management also released new reference designs for power applications, aiming to increase Vishay’s share of bill of materials in customer projects.

Drivers of Future Performance

Vishay’s outlook for the next quarter and year is underpinned by ongoing customer demand in its core growth segments and continued capacity investments.

• Capacity expansion and technology rollout: Management expects significant capital expenditures in the first half of the year, primarily for the 12-inch wafer fabrication facility and targeted expansions in capacitors, inductors, and tantalum polymer products. These investments are intended to meet rising demand in automotive, AI, and industrial markets and are expected to peak in the current year.

• Improving product mix and margin progress: Price increases on select products, reduced historical declines in average selling prices (ASP), and the ramp-up of the Newport fab are expected to support margin improvement. CFO David McConnell noted that the “annual contractual negotiations” resulted in less ASP decline than usual, while higher input costs—especially metals—remain a headwind.

• Market share and customer engagement: Management is focused on gaining share in automotive and industrial applications, reengaging previously underserved customers, and leveraging new product introductions like silicon carbide MOSFETs. Execution on audits and customer qualifications, particularly in automotive, is seen as a key milestone for future revenue growth.

Catalysts in Upcoming Quarters

In the coming quarters, our analyst team will focus on (1) the execution of capacity expansion projects, especially at the 12-inch wafer fab, (2) the pace of customer qualifications—particularly in automotive—and resulting share gains, and (3) the rollout and customer adoption of new silicon carbide and high-voltage products. Progress on margin improvement and the ability to manage input cost pressures will also be monitored for signs of sustainable profitability.

Vishay Intertechnology currently trades at $20.21, down from $20.74 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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