Vishay's Q2 2025: Unpacking Key Contradictions on Inventory, AI Engagement, Tariffs, and M&A Strategy

Inventory levels and demand trends, AI customer engagement and content per tray, U.S. tariffs impact on P&L, inorganic growth through M&A are the key contradictions discussed in Vishay's latest 2025Q2 earnings call.



Revenue Growth and Product Capacity Expansion:
- Vishay Intertechnology reported a 7% increase in revenue for Q2 2025, reaching $762 million.
- The company's capacity expansion between 2023 and 2028, totaling approximately $775 million, has positioned Vishay to meet increased demand in high-growth, higher profit products.

Book-to-Bill Ratio and Customer Demand:
- Vishay's book-to-bill ratio was positive at 1.02 for the second quarter, indicating strong customer demand.
- Solid order intake was driven by continued demand momentum in smart grid infrastructure projects and AI power applications.

Segment Performance and Market Dynamics:
- Automotive revenue increased by 4%, while Industrial revenue increased by 9%, and Aerospace/Defense revenue increased by 5%.
- Growth was attributed to improved demand from Tier 1 automotive customers, normalization of customer and channel inventories, and increased demand in smart grid infrastructure and AI chip production.

Financial Impact of Newport Fab and MOSFET Margins:
- The Newport fab had an approximate 160 basis point negative impact on Vishay's gross margin, which is expected to remain around 160 to 185 basis points in Q3.
- MOSFET gross margins declined by 200 basis points sequentially due to manufacturing inefficiencies, but improvements are expected as manufacturing issues are resolved.