Vishay Intertechnology (VSH) 7 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Vishay Intertechnology Q2 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Peter Henrici, Investor Relations. Please go ahead.

Jill. you, Thank welcome conference and Intertechnology's quarter second Good to earnings call. XXXX morning, Vishay our Executive today. Joel McConnell, and President Smejkal, Chief Financial will our Officer; Officer, join me Chief Dave and second This reported morning, results our we quarter. for A Relations of Investor copy in at section of is our earnings available our the ir.vishay.com. website release live the and is be can call This over accessed being broadcast web through website. our

our call will be replay on and is available recorded website. being today's addition, In via

also posted We the we will be call, slide to ir.vishay.com. during presentation at referring a which

You statements and conference to making statements should the could in we call, from statements. today's subject differ that forward-looking be aware discussing that cause will be to actual risks are performance. forward-looking and uncertainties events results future These

results release filings today's to differ, For discussion Exchange Securities a please and Form XX-Q Form cause press XX-K with and the Commission. and of factors could Vishay's see that

information including on are in and non-GAAP and release We press call. various our on conference measures this GAAP

We in businesses useful reconciliation have should believe find included a our provide be press useful measures conjunction which results. use the because when they investors presentation performance GAAP you operating non-GAAP on the by release believe we we will We measures. comparing about non-GAAP our ir.vishay.com, our in in non-GAAP posted and information full of GAAP to considered and and with GAAP

Chief Joel Smejkal. Officer, President Executive turn I and over call Now to the

your guidance Dave XXXX progress second second that, quarter quarter. will review X-year Then our the you, call. initiatives report Thank of I'll Peter. plan our under any second channel for a our give for start review quarter you quarter third financial of revenue the a answer of After to market, results by and conference strategic Thank XXXX questions. my our Good everyone. with our morning, I'll on you the take through for and joining end remarks region. a you

$XX.X margin of by line consumer gross from and was by also volume up from and by million $XXX.X has an Distribution lower the to positively results quarter-on-quarter, revenue the our was that AI quarter, pulls SG&A For versus customers China with notebooks related revenue Taiwan essentially acquisition over Newport negatively demand, XX sparks from and server reporting profit of months. capacity revenue automotive the reengagement we devices. our impacted are The flat customer to impacted last the and revenue, destocking. from a our in second guidance. Revenue supported initiative, quarter, million additional and come online was intensified customer testament industrial first

good X.X. making are progress Vishay in We executing

As we expected, the inventory quarter. digestion second continued into the

some channel to started carrying for automotive also distributor we of rates the We've indications of Some from demand level customers. their are semiconductor are replenishment the industrial on and activities steadily inventory as AI semiconductors are bookings Nevertheless, improving, customers for certain inventory lines, of particularly and see starting from vehicle and passive to of servers product high computing. and up from consumption still higher see a rebalancing suppliers. ramps

design management on in high AI automotive second continued and last tied automotive discussion Europe. new with activity below and X a starting to schedule of and purchasing year's market to customers revenue flat electronics, closer Automotive around Tier plans persistent production sales slide agreement in at less EV expensive review customers chipsets. content. Even and electronic back pulled battery all compact pulled EV input platforms. as their interest on Europe including their automotive and demand compared Americas, revenue, the consumers Europe increasing quarter from with America less the primarily of quarter though to containing North ADAS lower, systems, cars, from X. OEMs the on were look some postponed the driving a X.X% second rates, we're by on towards seeing now take our revenue Let's first quarter Based in XX.X% look end declined

expansion, We important are silicon with also OEM stepped capacity we up signed automotive our engagement with agreement an first-time automotive Xs. MOSFET Tier supply OEMs an us. in investing and Because

we For programs our around modules onboard and more silicon technical XXXX carbide XXXX and customers carbide for tied assemblies meetings charging. These planned push, traction silicon held inverter projects new potential existing with MOSFETs launches. to and for customer and are

Trench as item these products. customer now both engineers move with we Planar towards silicon action and is provide technologies to of the Our the samples commercializing carbide

quarter, end Turning markets, remains overall continuing to industrial customers sluggish. with second during demand the inventory destock to

revenue quarter, for Asia signal was DC to see first automation, industrial a applications of improving including high-voltage the improved Newport, China. in quarter-over-quarter. Late essentially factory we power meters, in started orders in flat Excluding bookings and

We storage. Near-term, to lull Turkish and to in sizable solid This we energy smart in a quarter. the markets grid automation, follow-on receive for is be our to both from customer high-voltage total industrial smart the in a and supply while a getting of products charging in and defense $XXX grid on to the the OEMs, Government from temporary a due Israel. Orders around was missile remains facilitate not from for agreements change of X.X% awarding and declined made aircraft directive projects also driver infrastructure, the supplier. Americas supplies agreement remains orders of for a last with funding initiative. preferred their remains and EV orders of grid activity higher Vishay and supply will million direct year's a guidance renewable European design combat the shortages key master from contracts pushed expect Europe automation also pulls Sales applications key as systems some networks result them pushing reengagement keeps second to to Revenue were out. received demand under down end strong; related industrial with OEMs energy than a quarter capacitors approximately since for activity the aerospace continue and XX.X% government to year. of for Design focused a now customer beginning Americas

supplying We with are OEMs. EMS contracts to also satisfy defense materials to and their military aerospace

Vishay the these quarter. all-time to agreements new year's Because We medical third developing below delivered at customers, for relationships on XX.X% our in deepening first revenue new last potential the medical magnetics issues. quarter complete customers a XXXX. Medical markets, hired As increased the setting similar newly segment we was from distributor a of the with second who we look our contracts of existing resolved with taking who and now these an the the is in growth leader Vishay, leveraging reengagement portfolio, role and product year, great of focused in appropriate fully steps customer breadth our has custom high the the medical up customers. supply more we share medical we're have with technologies supply of slightly created initiative. This to QX us increased and forward bring medical end chain to discussions we expect leader, in with engagement into see into largest quarter, their will the

XX.X% pandemic. along of markets remain telecom, categories quarter design included these and telemedicine on equipment, While diagnostics that down during devices end in the the we adoption and patient and other year. versus the computing taken last focused have activity activity implantable as Revenue was also second X.X% hold, with home consumer and applications monitoring see started monitoring the quarter-over-quarter from remote

to and servers server China as in see initial projects Orders manufacturers the key increase to for and of pockets continue to growth continued like Taiwan networks. orders and power production. tablets as Design grow AI activity laptops related server computers continue power, well. Asia chipsets, now storage of We AI to in launched AI areas and notebook in

X.X emerging of we Vishay a MOSFETs diodes, components the of extended percentage a growth. now is key makers portfolio application as reference AI increased to AI benefits gain more position While field and greater participate of our Vishay mainly we example engineering fully in Vishay designs, the initial resources we're initiatives we've and designing Difficulty] market on positioning the in are the in Vishay of have [Technical capacity, another good at AI chipset with to market. This our

demand X; military, was revenue related QX, prior excluding servers, and EMS particularly primarily as allowing increasing to tied customers and customers lower the improving with be flow channel decreased their quarter-over-quarter volumes customer on to higher demand year-over-year AI China automotive below demand in revenue to needs. slide in forecast revenue, increased future Americas, year, the on and versus and and to reduced XX.X% less In sales remain Turning customers, XX.X% order about lower end Europe. EMS short, OEM Taiwan. from visible wait and times XX.X% industrial X% lead and Americas

versus increased first last positive X.X% end EMS customers, markets are quarter performing was down and which XX.X% Distribution on focused well outlooks. military the versus revenue are year. and have Our

on off. initiative pricing Our shelves. in our increased 'XX, to distribution have reviews In deepen our distributor Part we've is and the engagement to beginning SKU SKU number increased customers resulted QX distribution time, with count distributors on at was same especially to expand on Vishay at demand positions we XX XX,XXX in added in with in part POS our continue approximately are of share declined Americas, steady local At to the win numbers over worldwide worldwide to count million strong position -- and SKUs. Inventory These while weakness quarter-over-quarter to help softness inventory turns quarter-over-quarter. of $XX by business. coverage, some meet their particularly the in pay increased weeks. EV China growth. focus inventory Europe the lower who while overseas by markets $XX.X those for customers, improved million, Asia. increasing Distribution the new X.X% due with and Asia we the held POS from

some was X the developing Asia higher, to on revenues slightly the Revenue at and was slide a turn lower with its revenue by and as macroeconomic let's AI. Europe in industrial spots while were X% -- distribution medical, challenges Finally, to demand. Americas weaken region. for continued on look up bright revenue

as X.X. and cost drive like over my our of I'd Vishay financial over minded call to the hand continued and Their of the turning Dave, their dedication as outcomes. I'll do appreciation aligns QX. to we commitment employees call Vishay become to now in towards to everything all controls to deepen financial Before Dave greater business to customer review us decision-making for with to express faster all to internal the well driving implementing engagement, focus to

Thank you, Joel. everyone. morning, Good

Let's the start on quarter second our highlights results slide review the X. with of

million million a for $XX the the within and inductors XX.X%, one. reflecting our revenues offset in volume and ASPs attributed decrease decreased X.XX X.X% were by for in of X.X% decreased Backlog revenue. Compared year, months increase category, including decrease volume Second MOSFETs and in for $X.X in when first to million, by million a end was down X.X quarter, Newport reduction $XXX.X comprised decreased flat revenues. The net offset $X.X Revenues to passives revenues range from the million Book-to-bill months and acquisition X.X Newport $XX to our a quarter backlog slight decrease compared million the Newport partially alignments reduction business reportable By quarter X.X. X.X% to was was segment, and reflects guidance. inventory in By an X.X volume, quarter for and a resistors ASPs. Newport increase increase primarily of in and second from the a reflects quarter revenue automotive to decrease rebalancing attributable capacitors. X.XX reduction price million decreased to declines an Opto. the semis of were mainly in for for of $X.X in XX.X% the in in were ASPs distribution including of by increase of These semis the last the X.X in to passives. $X compared primarily partially months in revenues to X.X Xs a Tier decrease, at slight X.XX product of decrease X.X% and million $X.X months backlog passives. channels, a reflecting

first quarter, statement includes containment for $XX one than guidance the first XXX quarter. to in and was slightly EBITDA entire highlights. reflects Newport measures and a was a $XXX was quarter to primarily of presenting lower of quarter. second the million basis X.X% from was the addition XX the to for the the XX.X% the the quarter, X.X% of for to Newport an in million of the which $XXX.X first $XX.X quarter and XXXX. was reflecting on the primarily next to the of $XX Moving income addition expenses XX.X% negative million. Gross approximately and margin fab. Operating included the full for margin from accruals. margin Newport expense profit, bonus quarter, due our Compared from for million slide, points. lower, of due EBITDA cost the Newport inclusion million for in from in Gross impact Depreciation gross the SG&A up quarter points $XXX.X the were lower to compared million basis decreased XX.X%, quarter XX.X% quarter, first margin down

effective EPS for was which share to and tax yields share the the approximately of business for for margin approximately gross the the of to tax table revenue, and our weighing the quarter. XXXX. the the Newport of reference, first rate basis was share results per per book-to-bill margin XXX that an note, MOSFETs ease includes for reportable entirely year-to-date quarter, normalized Our in each Proceeding illustrating second points. in compared quarter gross the period are effective $X.XX presentation segment's ratios $X.XX for for a the on reported slide for business approximately of $X.XX second rate XX%, X; quarter XX% per segment, segments. Of

million was quarter same quarter including million negative XX; million, to Total second the of repurchases. the $XX.X quarter. The Continuing the X for CapEx were $XX installment the trailing returns paid, in $XX flat resulting conversion capacity slightly and and to the sales the the Total cash our payments $XX amounted XX used XX inventory designated repatriation $XX $XX.X compared cycle the in in capital our in was for first from million XXX average and a to X.X% On projects an was see second days, of latest cash respectively. to you for we slide for cycle share for in conversion DPO and of for $XX.X expansion quarter. Stockholder expansion aforementioned the on an days for was related and U.S. consisting can to million Inventory Turning the year. cash $XX.XX X.X intensity a capacity DSO XXX operating to per XX-month projects. cash million second flow repurchased up quarter tax. a during million, basis, quarter. $XXX $XX for cash transition positive last taxes shares XX.X% tax million $XX million our XXX first day at the days, and the metrics; dividend to was period compared for to free quarter of million Due the quarterly at quarter share. slide of included We up quarter investments price million, outstanding days.

least XXXX, still as At cash U.S. and continue $XX $XXX million plan. million short-term we in approximately have expect stockholders. on we fund quarter, For to of to to investments million Cash deploy we at return the strategic to $XXX decreased end our the at end the cash hand of quarter to

Newport of our in our acquisition the dividends, taxes U.S., expansion. primarily reminder, Newport and our earnings million cash interest we and a expansion to fund fund investments. hand Ametherm we strategic principal the are As share repurchases end, fund using and Israel other payments from the are and the and cash on $XXX net the to that required U.S., cash accumulated repatriated using to quarter, we To of during to U.S.-based

withholding and As policy, at on be and the and cash planned with taxes, in a reminder, cash The negative revolver liability in must outside our our of investments second revolver tax expected to accrued on free To U.S. have subsidiaries, world pay stockholder expected we operations subsidiaries earnings repatriations timing from and payments we an expect for our from based return also liquidity accumulated to the our end future based draw Israel on of these adequate of provides repatriate we foreign the to estimated Israel short-term remaining certain for under approximately our million have in fund we the $XX Germany. quarter, cash the the held to are year $XX us significantly, U.S. and countries, cash At in and of gap. The fill Germany. million investments the around most Newport

and tax local The countries repatriating liquidity significant requires cash are million $XXX of our in in investments that for plan projects held restrictive subsidiaries rates in strategic short-term are regulations expansion Our high cash. a with and remaining located for Germany.

We have we those accrued indefinitely taxes not them reinvested. repatriate earnings deemed have because to

guidance; of XXXX, margin XX.X%, -- and slide be plus is Turning our expected XX% to to for of are basis be to $XXX million. Gross between for XX million third range revenues quarter $XXX XX in the or minus expected points. the

third to Newport for gross the minus has $XXX an quarter quarter $XX the discretionary basis and year. headcount to or our be SG&A million and or million XXX Included and for drag million XXX point the approximate point freezes be addition minus are expense the $X is of $XX basis includes plus expected in to the travel. full full SG&A $XXX $X planned that Depreciation which year. is $XXX Newport, million expenses expected offset to margin. million, adjustments for lower related by on spending, the which plus guidance on XXXX to million for million, is approximately and hiring approximately

For approximately XXXX, a the still tax rate turn expect call we Joel. of to back now effective normalized XX%. I'll

commitments XX, and through of Please XXXX. to In primarily [indiscernible] XXXX, expansion best accelerate in strategic growth product Dave. of we spend on internally we had the for displays million innovation. We for to $XXX X planned to sustainability, greater you, X-year both our revenue positioned expanding to capacity turn and pulling externally Thank in markets customers, focusing our our are plan. and plan on which originally drive e-mobility execute Slide designed megatrends returns meet addressable portfolio. and our the and CapEx growth our scale is to This capacity are levers

industry we the is year, midyear expected. the slower of at this recovery However, point than

million and ]. We because to UK. adjustment have This does now plan spend a now to between XXXX. not timetable $XXX SK million acquisition keyfoundries decided Itzehoe total in $XXX and our our investments do capacity XXXX our wafer XXXX spending commitments fab of therefore, the Newport XXXX for of alter South in CapEx a can intermediate commitment from meet to we between have, billion in [ and adjust total and Wales $X.X recent We and customer the qualification of of Korea still this the beyond

on a slide to for these report turn progress XX Let's levers.

schedule we the fifth The target four are qualification a XXXX. We're of to great the production quarter qualify Newport, of first and to end XXXX. second currently for the optimization are ] doing of transition the asset complete high the on Newport of are with keyfoundries, of seven automotive product with managing. with MOSFETs, qualification transfer of in I qualification in of are are with the of of three and the to SK new With ramp are year technology by Korea, on in technologies transfers they yield. complete our first First job them colleagues on to planning [ technologies thank the partner first aggressively automotive-grade quarter quarter transfer families the XXXX in four MOSFETs. which the commercial the by the we up quarter technology industrial to of also schedule of end the 'XX, technologies

We complete are fourth XXXX. first have in A of in being available of to and is the planning audits qualification to schedule automotive samples customer the engineering developed. quarter quarter

very collaborated aggressive qualified capacity for In in semiconductor Taiwan, the closing ceremony. process transfers. with current manage well of team our and annualized MOSFETs QX, large our joint expect progressing well. diodes positively also in and colleagues products Continuing increase and Itzehoe, with to MOSFET roof to have volume to the and have quarter. fourth we some products of Newport XXXX this developments. Thank to internally colleagues number more of Taipei, are The XX% We automotive compared in our [ to building output commercial we executing of MOSFETs had our extremely expect in the these X-inch technology ship and the Itzehoe MOSFET fab entire in a Itzehoe done In is very colleagues to fab ] wafer in automotive XX-inch by XXXX. for you

project XX% to expect the constrained of product changed. We still XX%. early to XXXX. capacity ship to The Turin, in Italy status annualized automotive diodes qualified to We and not of XXXX in and qualification lines to X.X% has in increase expect by capacity be by commercially expansion our completing expand

provides La environment location when Now at for a passive product commercially this QX. of customers with in inductors qualified looking we This location supply Laguna, competitive components; technology. nontariff at Mexico, shipped the

to We XXXX. qualification automotive of track complete second the in are on the will Automotive visit the qualify to half customers facility site. also thereafter the

expect first our annualized the half XX%. commercially capacity by Juarez, were Volume to shipping automotive qualified in and facility We we're resistors products. small. approximately Mexico, some for increase continue to At

XXXX. to in annualized by here We expand capacity to -- continue XX% increase capacity also

products. to outsource We also of our commodity on manufacturing to continue some subcontractors add

the During for inductors. two quarter, subcontractors subcontractors two we added and diodes for

X,XXX ] numbers X,XXX just under QX. of for in X,XXX We Vishay over part total for have diodes numbers for part number [ added part over a inductors and additions

we broadened achieving set a In markets use in not to path have serve. we targets. our XXXX to did As external previously XXXX, participate result, capacity our we on goals of our portfolio, positioning us for

We generate in from as revenue qualify X% to XXXX expect we suppliers. more than passives continue outsourced to

XX% expect greater from fabs in We XXXX. semiconductor outsourced wafer production than

into We is the company quarter, named that a current small in in Ametherm XX% XXX outside management expect protection system even thermister volume and Laguna inrush for in our example half scaling applications chargers. and the assembly the has of Ametherm. Nevada. has Ametherm portfolio as for well electric support located the solutions vehicles campus for Ametherm energy by our home XXXX. products to expanding limiter into during inverters current where in strategy. To a market further circuits. X,XXX-volt in operates needs Ametherm manufacturing support for second and current high-voltage and Also, to products can are City, ability produce Throughout capacity convert inrush facility we future electricity. company, in as the has the higher for greater from the stations facility, need various Ametherm's circuit battery precharged volt acquired EV La production precharged voltages, the the has semiconductor the expand are of temperature this which needs an monitoring. Ametherm EVs use smallest the Carson we which current needed for future DC DC solar year, charging than

glad part Vishay as team to family. are of have We the the Ametherm

our The and cycle In development to the terms package and carbide planar foundry different time are the X,XXX-volt our loaded new commercialize and X,XXX-volt nine product planning carbide strategy, commercialize by is throughout of be current and plans capabilities. development cycle three with of our the long. We're -- to become foundry challenged technology. X,XXX-volt innovation trench time silicon product; the continues to capacity planar we has loaded track for resistance part on of partner three each planar types the to constraints fully this technology, and QX the partners. The of extremely numbers release QX XXX-volt silicon is

collaborating expedite them are our with We to closely product.

and taking equipment meantime, of of the Our delivery Vishay a forward with customer by our We're and moving QX megatrends To we test e-mobility share blunting on have in and develop in is recovery plans aggressively current like drive the operational X.X. released XXXX. We XXXX samples the push us XXXX. order in to In products expand end growth, to company initiatives to it and quarter opportunity first Newport we'd how to to production the returns. revenue year, we're now, Vishay plan wrap culture industry corporate trench with unique is assigned this order in is reshaping of the the take quarter is to and forward for laser-focused the QX with customers silicon still boosted 'XX, executing plans technologies in the by of in and to profitability upturn a the and to carbide these facility in into at and position to Vishay's our of XXXX demand, advantage for the third and all of although the providing market gain meet up sustainability. We're expect full than late available between revenue improve becoming excellence, X,XXX-volt long longer first with 'XX. faster our run list

capacity our differentiation, we've also only past for they when years, X.X now can they scale. supplier support customers to that investments over but in two the With not rely Vishay are to the made demonstrating expanding technology is we their on, volumes the

of a our strategy some contracts tasked very Vishay to customers start to carbide customer XXXX, And being up and expanding us agreements our with first of advancing call gaining Vishay a second numbers OEM to In initiatives Our portfolio segment preferred the customer Vishay have In an supply are discussing leader deepen alone, game. master a with established Aerospace-Defense, adapting engagement silicon pleased the with up our capture quarter delivering session. the on of our question-and-answer our became we since distributor agreement to capacity, and work We're adding we design increase part made bill In awarding added on second of to first hired CEO. promise previously for supply Medical, facilitate the Vishay clearly is as step we portfolio driving to Vishay very expanding stockholders automotive, technologies. We're materials. working. In while half share you, made our to percent progress the adding markets. silicon OEM signed multiyear of technology from positioning have supplier. narrow time. in with to full XX,XXX we that MOSFET SKUs, we've with underserved engagement automotive are who supplier one delivers a conditions. Jill, has activity to I let's of the the to with stepping the on initiatives, Vishay's our of to list will and our engineers market the products to traction I'm continue greater the

today from [Operator Stifel. Instructions] comes with Our Matt first question Sheerin

Yes.

to And percent expansion. Yet that you about. the just area like said you capacity sticking if you're Germany across Joel, expand expansion, Newport, it the take still sounds down you you year-on-year. XX-plus capacity one at was were like XX% talked look different MOSFET looks for you to the question, sets business, your except regarding out on if that plans It product track, expansion. like First still

So on. it still correction that like sounds going is

have So I next you what's that capacity you utilization? bring the as do And question fill year? capacity can guess the it on that is confidence you

for Hi The utilization the today, utilization. Yes. capacity [Technical XX% XX% for is the capacity Matt, for semiconductors MOSFETs question. thanks specifically, Difficulty] it's

than computer that and schedule MOSFETs. rebalancing originally for We saw QX, agreement. the The rebalanced on And agreements. are schedule polls the what the low-voltage give pulled customer. we seeing are things by in the of the beginning in they less They intended we a increase some automotive business to automotive, they us QX confident had

the But capacity Adding excuse what is still for to decided -- we're capacity. our key XX-inch the foundries with slight expansion with investment, have to for very me, market Itzehoe project important quarter Itzehoe than yeah, we're two another going as a the a help we softness delay or sideways expected, longer So capital, very to XX-volt to just we we just seen slight a fab in a capacity continued us out -- important. delay. intermediate doing. is confident make a

Got it.

the orders. green sounds weakness, on seeing been in Okay. terms least starting that. you're like to shoots of your at it obviously, you're commentary only that's supplier auto some not And But see

to sequentially. You're you again? the overall be Do auto or that will guiding flat down company expect be revenue flat

readjusted. agreements have We what schedule even move saw auto We from see had demand they with and in We in a positive it their flat scheduling guide though QX. QX agreements we to in decided increasing with QX. happened

the for workdays demand even point, QX We But this declining week-by-week a are count decided it bit guide in decided the go seeing from that up. positive we've flat signals car would pulls auto Europe, auto. in at are though bit. the to fewer forecasted QX over a customers show holidays automotive to seasonal QX flat, a So

lastly, AI and commentary center some but positive Okay. know of the I your And data relatively you about that's just small it's like a it had percentage sounds growing. opportunity. revenue,

and servers So maybe there? opportunity and traditional you're in some could servers where opportunity the metrics us you share content give your around going versus AI

Yeah.

on Blackwell. positioned some initial have NVIDIA We the reference designs,

designs. on as power resistor We the is IHLP-style have opportunities, diodes inductor, MOSFETs sense those current we inductor see well. the there, Also,

of bill Vishay teardowns seen, server. $XX that the is increase content is per materials around the So AI The content we've on higher.

in designing we've So on Vishay China make first the we're materials. companies the more Taiwan product with a many excited bill about seen closely of sure to is look. We're of and as what

positioning overall servers The is but You're small, we're hard. is right. of and PCs small quantities the

Our sure right as very to through hard working chipset Asia the following region, company. companies the we're and team reference make Americas well the design both attached as designs, Asia working in to the chipset is with with the

what we're the we We're in capacity can in So putting optimistic place. do.

quantity yet overall AI the quite said, small. is you As of devices still

from Our question Joshua TD next from comes Cowen. Buchalter

more do wanted the I this of you be inventory market. and point at mean and you the on guide, about that your in third Matt. to demand mentioned throughout the what on feel follow Xs do up Maybe the to earnings taking we've you auto into a agnostic lot you're quarter, this looking understand to needs I are conservatism looks or end to with there's like ask levels and season. of where Tier But that customers, directionally, things an heard that the at on like? done what still the demand point line I is view work shipping think

Hi of we When Josh. is the that customers, a Thanks with agreements annual in for Okay. portion automotive at consignment. our question. look

So consignment we they placing pull need and they that as inventory it. we're have

of position. there we is normal at the So would a say inventory a more

we up digestion. weeks and it's requiring inventory X, sometimes X or excessive have consignment, of it's severe months not to but of four Sometimes

It's its see excessive. We moving I some didn't more there stuff. capacity. still book-to-bills with We were say MOSFET. our on auto The necessarily inventory Vishay have excess digest. others, to in positively lead not ability short year, is we not which to times Semis, are didn't the still there. inventory. passives, allocation first. Last there's some consignment, out have inventory and won't We

digestion top of So competitors' this to get peers. inventory our This and is where calls, is have our I've around work to the in sales we've for not past wait our us Vishay. more for and gain got initiative for share said to a team positioned

you know expansion color focus an meaningfully total for the at representing there, more you that's Thank distributors. distribution broadly the The apologize company. I Alright. follow-up, the semiconductors -- volatility quarter? them inventory if more are I ] share this area your with area Joel. can I comfort given, SKU of than Vishay and Can -- been grew count you And passive lesser missed with space, in it, extent, to levels particular, particular then and, the where [ across it's of now? distribution right a but in been an

The had Asia XX.X. weeks Yeah. POS, In down XX up. weeks inventory QX. We're in this is Asia, and XX pick inventory at based in by is we are were QX. starting inventory weeks, on to of XX POS POS to we of weeks current worldwide. QX in The We at

in weeks in adding customer. in QX, that, softer and XX QX glad with of the weeks. so but we the in softer and weeks. we is the XX to In the So you SKUs the QX QX react big distributor in was we're XX.X, the was Americas is POS POS also Catalog QX, XX.X was Europe, can the channel at a remember, if there. XX. And in inventory inventory part have product In Americas, Europe.

number the that's In part even the adds Americas we talked see about you positioning count inventory Europe, Vishay. in in bit. a distributor's numbers the up number of of It to part that really So previously we're SKU because little didn't have by going and the computer part in recognized a we wasn't system. participate -- weeks

really widening market So we're and and share. participate our to compete gain ability

are them that those grow to them in and And levels bring or trying in you're and to trying you Americas with those I mean, further particular, levels, comfortable Europe, right down you're now? in are

then for POS units as the their but number we inventory to alignment, numbers, to the continue trying them pricing But help going the POS do more add to us. reviews we consume is distributors, do part business We're to go division-by-division, that part they to have, is going their down. comparisons. bring they

part quarter-on-quarter. We add will continue numbers to

inventory have a of we'll the positioning level Vishay have and then added. consumption that's we'll additional inventory So

two a it's from where to and going at going the be about you're POS add think more participate numbers. next part further inventory in in is quarters, I to So see top-level view we as

next apologies Our from Bhattacharya, my that Ruplu I America. of Bank from mispronounced if question is

the XXX lower gross headwind like be thought on that, And more for My bps bps. first margin. question is bps the expected it's was but guidance XXX guide now looks I revenue XXX flat It then XQ, looking for in is fab XQ. into the sequentially, to relatively to Newport fiscal on XXX bps

higher expectation is are just impacting double the that, pricing that So any what's XQ that environment? the other if and any any impacts in other you trending? you How are sequentially factors margin And click can weave impact? Joel, driving -- for gross XQ? can also And on that between

Ruplu. Hi Okay.

couple on part takes. forecast, So is Newport a significant pricing million million another to an $X may $X built a [ ]. have portion The down significant X% little basis But puts There's sales 'XX ASPs ], the million range. higher This was 'XX a semi next points 'XX a to QX, have 'XX from okay? of to the and couple additional we side, of of the and is [ this in $XX Newport million, into $XX XX quarter So okay? going the components. the to of quarter the impact that the approximately

Newport the volumes impact, So asked sales because of in the the legacy about of the reason ahead. you part of of the that's decrease product. when Go increase

on just in pricing of comment that. ask to pricing, on if overall was I No, environment going can terms like-for-like the you

that we agreements, wasn't big there. decline in down automotive year, so book impact. doing have we're give is prices the POS with at these an to It the is high is fixed actual and we which are there the see net the ASP When there some was guys. alignments pricing we're at price was lower, Pricing, look the those was to Where and If the reducing that, ASP paper, protection our wasn't it we Yeah. for distributor. the contractual calendar the distributors, quarter. on some pricing price

request are the people in there large we're price pressure always, alignment these moves that So seeing. And there's pricing do -- part when quotation. opportunities, with as a

because we XX% lower, become spot the we large generally said, for XX%, suppliers on passives, suppliers lower opportunities, aggressive. there. aggressive Other MOSFETs is have are ours say have pricing utilization. to is XX%. capacity environment They So stable. here would I more utilization, and be

adjustments make position had not customers we've at on So some board, sure coming we're to the but make we've in to opportunities. price, we continue had that give with got these capacity present maintain to growth our significant, to us

some spot pressure is So price and here there there.

it. Got

free we of remind And year, in fiscal or for that if free of always less next also for M&A ask should this fiscal allocation down But buybacks? is capital spend potential 'XX. us dividend? opportunity -- even For we my And priorities? Vishay's good flow think Can think about your years. I'll can you your question, expectation maybe how you, should Dave. cash in possibility cash even had a that more And the about more afford if 'XX? how flow CapEx does fiscal you in pretty

think the I the start for flow Ruplu. -- cash flow, free free So let's cash

minus substantial our Day, think a on XXXX graph. showed number we I fairly Investor for the on

much So today. so we'll are than Maybe more okay? we not negative, be

capital terms capital sorry, allocation -- the -- I'm dividend the In of strategy. the allocation

and two have of year. hand. already free the okay? go sorry, in had word the -- going to right we're go out. We're to the So is pushing one it quick We out Itzehoe We've our we're the not cash pushing recovery push but think by our recovery, back spending about reasons already think Joel's we've I couple the this those already because and impacted hasn't happened Newport, quarters, is of as comments out, a Ametherm. had I So is hand acquisitions had for of

$XXX to CapEx, the free and to million, continuing continuing continuing spend to to we're given up the $XXX But pursue we're cash, M&A that's I strategy. So shareholder. million plan. existing the We're return the to think

ask higher Joel, a Maybe I'll the again, you last question. question. for Okay. level

And with meaningful more operating driver distribution. effort? any What that growth you've continue we quarters do growth how gains on you correction respect in at many with be it can inventory inventory, channel, destocking are working flesh and that the overall, then a environment, So a you to look of to a revenue will to that's in with or for just been driver your to out the respect meaningful prior take when the at And piggy increasing question, share be backing for or excess you've SKU been -- innings there is? happening distributors, and think count.

many and semiconductor first. start was discussion never stuffed. part really so with passive The How It's let's -- quarters inventory? overextended. passive in inventory wasn't on passives It

getting my the in demand, seeing quickly. near And customers late seeing it passives becoming are little orders Already normalized saying we're QX are in here's the on a So visibility that are passives. more QX, better parity.

not of year. to at the semis level. Semiconductors to I quarter It's will a year to also different, to take of say QX it be and two inventory digestion days one our there. out into segments, normalized of think I that's the a more EMS, and little still the I Vishay of on the but quarters talk as depends going talk the next touch distributors, level market QX, end overall, a passives for into is of at maybe So looking I'll as are to others. And inventory again, and they're

can't this wait. have ahead and and So of to get sit we

Many quarter what is we the in next were year. passives. What on distribution? say to moving with last middle innings. So of inning are had divisions business, meetings meetings underperforming we're semis, about see traveling the in distributors. the divisions, our is well. initial second forward the We've I'll really and where on our we inventory end had units early intelligence of business They had this have year the our we

Sometimes large away that meeting, product. We that's a of learning from a fitting have a market. walk product we don't to need distributor develop that the size we

as little part shorter So we But a creating have technology that and that's will product time. time. take numbers, as those things far

XXXX. middle numbers. numbers a distributors. It's at just part enjoy in the we're We we're greater populating will in adding think increase percent going to these aren't forward These where going say part position. a to the expected print I POS innings. we're catalog POS of also we're So is large because more

reliable to the forward the feel Vishay's in that the we supplier, participate its POS makes more, we the when support the move, be finally upturn. upfront better numbers a at where support with distributors to capacity the the past, as looking distributor's we're the be going So didn't market in part to have to and positioned XXXX capacity to adding seen we're

are we time. showing questions this no further And at

Joel turn remarks. So closing like for Smejkal to I back to it would

you. interest We'll thank questions you for again you and joining call. your in your our earnings in Jill, good see Thank Great. a everyone Thank Vishay. in Have November. you QX again for day.

our This does conclude program.

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