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Download the Report of Vishay Intertechnology, Inc. for year 2018

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    ANNUAL REPORT 2018 www.vishay.com VISHAY INTERTECHNOLOGY, INC. Vishay Intertechnology, Inc. 2018 ANNUAL REPORT 1

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    2018 SALES SALES BY SEGMENT SALES BY REGION 25% AMERICAS 34% RESISTORS / INDUCTORS 15% CAPACITORS 39% ASIA 18% MOSFETS 23% DIODES 36% EUROPE 10% OPTOELECTRONICS SALES BY END MARKET SALES BY CHANNEL 28% AUTOMOTIVE 36% OEM 7% EMS 38% INDUSTRIAL 7% COMPUTING 57% DISTRIBUTION 7% TELECOMMUNICATIONS 6% CONSUMER 5% POWER SUPPLIES 5% MILITARY / AEROSPACE 4% MEDICAL Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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    FROM THE EXECUTIVES Executive Chairman of the Board Chief Executive Officer MARC ZANDMAN DR. GERALD PAUL I am pleased to say that 2018 was a very good year for Vishay. Vishay continues I am happy to report that 2018 was a record year for Vishay in terms of revenue and to be a financially successful, solid, and predictable Company that is well the second highest ever in terms of profitability. As in the previous year, very high positioned for continued long-term growth. Our proven ability to sell innovative demand—in some cases extremely high demand—in all regions and in virtually all products to growing and demand-driven market segments drives our strong cash of our market segments drove this performance. Driven by increased sales volume, flow generation and strong balance sheet. Vishay demonstrated the ability to leverage its business model. During 2018 we continued to be an excellent generator of “free cash” (the amount of cash generated In May 2018 Vishay increased its quarterly dividend by 26% compared to the from operations in excess of capital expenditures and net proceeds from the sale previous quarter’s dividend. This significant increase proved once again that of assets). We generated $84 million in “free cash” during 2018 despite having paid the Company is committed to returning capital to our stockholders and showed cash taxes of $157 million related to the cash repatriation of $724 million after taxes. confidence in the strength of our ongoing cash flows. The year 2018 proved that Vishay’s strategy of focusing on the automotive and Vishay continues to grow through organic growth as well as acquisitions. We industrial end markets, while not neglecting our other end markets, clearly has paid often target high-margin niche businesses that meet our criteria such as our 2018 off. By keeping our fixed cost controls in place while further improving efficiencies, acquisition, UltraSource. We continue to explore opportunistic acquisitions that fit we were able to benefit from strong market conditions to the fullest extent possible. the Company’s business model and support our Growth Plan. During 2018 Vishay again offset the negative impact of inflation on the contributive In November 2018 Vishay announced the appointment of Michael J. Cody to its margin through cost reduction and innovation. Having substantially increased Board of Directors. Mr. Cody had a distinguished career at Raytheon Company, manufacturing capacities for our critical product lines, we feel prepared to face future where he served as Vice President of Corporate Development from 2009 to 2017. challenges associated with our demand-driven and growing market segments. Michael brings to the Board extensive knowledge and experience in technology In 2018 we reacted quickly to the opportunities created by U.S. tax reform. In the and defense businesses, as well as mergers and acquisitions. We are committed course of the year, we repatriated cash to the U.S. and further simplified Vishay’s to a deliberate refreshment of the Board. balance sheet by refinancing some of our debt. We reduced the principal amount I remain very optimistic about Vishay, which has successfully navigated the of outstanding convertible debentures due 2040, 2041, and 2042 from $575 million sometimes calm and sometimes turbulent waters of the electronics industry since to $37 million. Because of U.S. tax reform, these debt instruments had become less the Company’s founding in 1962. As I take stock of all that the Company has tax-efficient. Benefits included a lower effective tax rate for 2018, the avoidance of achieved and will achieve, I look forward to continued success for Vishay. future effective tax rate increases due to the repurchased converts, and reduced equity dilution risks. I am grateful to all members of the Vishay family for their hard work and dedication and to our customers, vendors, strategic business partners, and Regardless of how long the unusually strong market conditions that we enjoyed shareholders for their unflagging support. during 2018 last, we strongly believe in the long-term growth of our business. We are well positioned to benefit from growth in virtually all of our market segments. I thank all of Vishay’s employees, customers, vendors, strategic business partners, and stockholders for their continued faith in Vishay. Vishay Intertechnology, Inc. 2018 ANNUAL REPORT 1

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    THE COMPANY OUR HISTORY Dr. Felix Zandman, with a loan from his cousin Alfred P. Slaner, founded Vishay in 1962 to develop and manufacture Bulk Metal® foil resistors. The Company was named after Dr. Zandman’s ancestral village in Lithuania, in memory of family members who perished in the Holocaust. When Dr. Zandman passed away in 2011, he left a lasting legacy. His high standards, ethics, and values are embedded in Vishay’s culture. They positively influence the business practices implemented by Vishay personnel across the globe every day. During the 1960s and 1970s, Vishay became known as the world’s leading manufacturer of foil resistors, PhotoStress® products, and strain gages. These products later became part of Vishay Precision Group (NYSE: VPG), which was spun off as an independent, publicly traded company in 2010. A GLOBAL INDUSTRY LEADER Vishay passive components and semiconductors are used by virtually all major manufacturers of electronic products worldwide, in the industrial, power supply, automotive, military, aerospace, medical, computing, telecommunications, and consumer markets. They are found inside products and systems used every day, from automobiles to airplanes to power grids to phones to pacemakers. In addition, Vishay has demonstrated an ability to customize components to meet specific customer needs. The world in which we live is built around innovative electronic technology. Macroeconomic growth drivers such as connectivity, mobility, and sustainability generate the need for components manufactured by Vishay. Vishay’s international footprint includes manufacturing plants in the Americas, Asia, Europe, and Israel, as well as sales offices worldwide. Vishay’s technology innovations, acquisition strategy, focus on cost control, “one-stop shop” service to customers, and custom design capabilities have made it a global industry leader. ACQUISITIONS Vishay has made a number of strategic acquisitions over the years. These include Dale® Electronics, Draloric® Electronic, Sfernice, Sprague® Electric, Roederstein®, Vitramon®, BCcomponents® (including Beyschlag®), the Semiconductor Business Group of TEMIC® (Telefunken and Siliconix®), the infrared component business of Infineon Technologies, General Semiconductor®, selected product lines from International Rectifier®, Huntington Electric, HiRel Systems, MCB Industrie, Holy Stone Polytech, Capella Microsystems, and UltraSource®. Vishay continues to explore opportunities for targeted acquisitions that fit its business model. 2 Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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    PASSIVE COMPONENTS Passive components do not require an energy source to perform or control their intended functions and are not themselves sources of energy. They are used to store or dissipate electrical energy, limit or resist electrical current, and help in filtering, attenuating, energy storage, surge suppression, measurement, sensing, timing, and tuning applications. Passive components are the main building blocks of electronic circuits. RESISTORS CAPACITORS Resistors limit or regulate the flow Capacitors store potential energy in an electric field and discharge it when of electrical current. They are used needed. They are used in many electronic circuits to block direct current in almost all electronic equipment. Vishay (DC) and allow alternating current (AC) to pass. Applications include power conversion, DC manufactures a wide variety of resistive products, linking, frequency conversion, bypass, decoupling, and filtering, and serving as backup energy including single (discrete) resistors based on sources. Types of capacitors manufactured by Vishay include tantalum (solid, wet, and polymer), film, wirewound, Power Metal Strip®, and other ceramic (both multilayer chip and disc), film, power, heavy current, and aluminum electrolytic technologies, as well as resistor networks and capacitors, as well as hybrid energy storage capacitors and supercapacitors. arrays, in which multiple resistors are combined in a single package. Vishay also manufactures battery management shunts, chip fuses, INDUCTORS AND TRANSFORMERS pyrotechnic initiators / igniters, variable resistors Inductors store energy in a magnetic field. They can be used to change AC (including potentiometers), and non-linear phase, resist AC current, filter out unwanted electrical signals, and perform other resistors (including thermistors, which are used functions. In AC electronic equipment, they are used to block AC and allow DC to pass. Vishay for current protection and temperature sensing). innovations include IHLP® power inductors, which outperform competing devices. Vishay’s resistor portfolio includes components with ultra high precision, very high stability, and Transformers are made up of at least two inductors on a common core of magnetic material. high power. They increase or decrease AC voltage or AC currents. Transformers are essential components in AC electrical energy transmission and distribution. SEMICONDUCTORS Semiconductors use silicon, germanium, gallium arsenide, gallium nitride, silicon carbide, and other semiconductor materials to perform functions including switching, amplifying, rectifying, and transmitting electrical signals. They can be either discrete components, sensors, or integrated circuits with up to several billion devices on a single chip. Semiconductors are sometimes referred to as active components because they require power to function, can control electron flow, and are able to inject power into a circuit. DIODES AND MOSFETs RECTIFIERS Metal-oxide-semiconductor field-effect transistors (MOSFETs), frequently used to amplify or switch electronic Diodes, used in electronics with a unidirectional flow of current, are signals by varying current, function as solid-state switches to control power. employed in a wide range of electronic systems to route, regulate, and block Unlike bipolar transistors, they need almost no input current to control load radio frequency (RF), analog, and power signals and also to protect systems current. MOSFETs enable power conversion into levels required by other from surges or electrostatic discharge (ESD) damage, as well as provide components. They are used as load switches to turn off specific functions electromagnetic interference (EMI) filtering. Rectifiers, which are composed or power supplies in devices such as smartphones when they are not in use, of one or more diodes, are used to convert AC to DC, a unidirectional thereby extending battery life. Vishay offers low voltage TrenchFET® power current required for operation of many power electronic systems. They are MOSFETs, medium voltage power MOSFETs, high voltage planar MOSFETs, often found in DC power supplies and high-voltage power transmission high voltage superjunction MOSFETs, and automotive grade MOSFETs. systems. Everyday uses include changing the AC voltage from a wall outlet to a specific DC voltage for phone chargers. INTEGRATED OPTOELECTRONICS CIRCUITS (ICs) Optoelectronic components emit light, detect light, or Integrated circuits (ICs) combine the functions of multiple semiconductors do both. They can convert light into electricity or electrical and passive components on a single chip. With their small size and low signals, convert electricity or electrical signals into light, and perform other cost, they are used in most electronic devices and equipment. IC products functions. Vishay is one of the world’s largest manufacturers of infrared (IR) from Vishay are focused on analog signal switching and routing, power components. Its optoelectronics portfolio includes IR emitters; IR receivers; conversion, power management, and integrated smart power solutions. photo detectors; optical sensors; IR data transceiver modules for wireless, They are used in end products such as tablets, notebooks, and desktop two-way data transfer; optocouplers and solid-state relays for circuit isolation; computers; game consoles; smartphones; industrial testing equipment; light emitting diodes (LEDs) for light sources; liquid crystal displays (LCDs); fixed telecommunications systems; automotive electronics; and other plasma displays; 7-segment displays; IR touch panels; and custom products. products and systems. Vishay Intertechnology, Inc. 2018 ANNUAL REPORT 3

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    AUTOMOTIVE DIVERSE Components manufactured by Vishay are used in a broad range of automotive systems including engine control and injector MARKETS systems; fuel pump control; exhaust emission control; steering, braking, and active safety control; transmission; stop / start; lighting; airbag control; heating / ventilation / air conditioning; infotainment; C2X connected car communications; autonomous and advanced driver assistance systems; navigation; and battery management. Vishay components are used in systems in electric and hybrid electric vehicles such as traction inverters, integrated electrical machines, DC/DC converters for 48 volt power subsystems (boardnets), battery management, on-board and off-board battery charging, and energy recuperation. Vishay manufactures many components that can withstand high temperatures and peak transients and are ideal for use in under the hood applications and higher voltage environments. INDUSTRIAL Vishay components help manage, store, and convert power; support power backup and energy harvesting solutions; drive and control motors; sense temperature; provide current measurement; and perform other tasks in factory automation, high power furnaces, machine to machine communications, electric power grid and power distribution systems, wind and solar power systems, and smart meters. Components from Vishay are also used in oil and gas exploration equipment; trains; escalators and elevators; heating and air conditioning systems; test and measurement equipment; lighting ballasts; smoke detectors; power tools; welding equipment; 3D printers; manufacturing, collaborative, and logistics robotic systems; and other industrial equipment and systems. Vishay components are well suited for the Industry 4.0 transition and the Internet of Things (IoT), which provides vital links in a wide range of applications. 4 Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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    Vishay, with its broad and competitive product and technology portfolio, supports customers in virtually every major market MILITARY AND sector. Types of components manufactured by Vishay are found inside the electronic AEROSPACE products and systems used every day, Vishay manufactures one of the industry’s broadest lines of around the world. military-qualified resistors and capacitors, as well as a number of other components that meet the stringent needs of military and aerospace customers for high reliability performance. Components manufactured by Vishay are used in applications in flight, cockpit, and cabin equipment in aircraft; unmanned aerial systems; drones; navigation and weather satellites; radar and sonar units; radio and satellite communications; guidance systems; deep space exploration; and more. For example, Vishay resistors, ceramic and tantalum capacitors, inductors, displays, MOSFETs, and rectifiers are used in cockpit panels. POWER SUPPLIES Adapters, converters, battery chargers, and uninterruptible power supplies (UPS) handle electric current from main power grids and batteries and adjust and control it for use by a wide variety of devices — from small, portable products to large industrial equipment. Power supplies must meet various power quality, efficiency, energy saving, and safety regulations. Their capabilities range from very low (milliwatts) to very high (kilowatts). Vishay components are used in rectification; power factor correction; galvanic insulation; temperature sensing, storage, and transformation; EMI suppression; inrush protection; and other applications in power supplies. Vishay Intertechnology, Inc. 2018 ANNUAL REPORT 5

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    TELECOMMUNICATIONS DIVERSE Vishay passive components and semiconductors are used in portable devices and telecommunications infrastructure. MARKETS Vishay components for handheld telecommunications devices and wearables support a number of functions including radio frequency modulation, power amplification, transmission, receiving, charge control, DC/DC conversion, load control, sensing, audio signal conditioning, and peripheral connectivity. For example, Vishay components improve efficiency and increase battery life in smartphones. In 4G and 5G systems, high frequency resistors and capacitors are used for signal filtering and impedance matching. Vishay components also are used for EMI filtering, lightning and surge line card protection, and other applications in transmission systems, base stations, and access infrastructure. COMPUTING Vishay components are found in notebooks, tablets, desktop computers, embedded systems, solid- state discs, switches and routers, and network servers. They manage power, filter out unwanted electrical signals, provide ESD protection, enable power backup, and perform other important circuit functions. In portable computing devices, they convert power; monitor power usage; extend battery life; enable short range, two-way, wireless connectivity; and support other functions. They also are found in peripherals including printers, photocopiers, and wireless chargers. Vishay advantages include high surge current capabilities, high power ratings, power efficiency, and long life. 6 Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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    CONSUMER Types of components manufactured by Vishay are used in lighting and in home appliances and systems including air conditioners, washing machines and dryers, refrigerators and freezers, robotic vacuum cleaners, and lawn mowers. They are used in smart home and home automation systems to control lights, switch appliances, support surveillance and access systems, and monitor and regulate heating and air conditioning equipment. In addition, they are found in entertainment and lifestyle products including TVs, e-book readers, smart speakers and voice-activated assistance systems, game consoles, virtual reality / augmented reality (VR / AR) devices, set-top boxes, smart watches, fitness bands, and more. For example, Vishay components are used in LCD TVs for power conversion, EMI filtering, rectification, power factor correction, analog / digital signal switching, audio amplification, interface protection, infrared receiving, and gesture recognition. MEDICAL High tech medical electronics play an important role in people’s lives. From large equipment such as X-ray machines and MRI systems to smaller devices such as hearing aids and finger pulse rate monitors, medical products and systems use types of components manufactured by Vishay. They are found in nerve stimulators, pacemakers, defibrillators, patient monitoring systems, instrumentation equipment, communications equipment, blood pressure cuffs, blood glucose meters, and more. Vishay is a leading manufacturer of telemetry coils for pacemakers and defibrillators and transformers for defibrillators, as well as capacitors for implantable devices and hearing aids. Vishay Intertechnology, Inc. 2018 ANNUAL REPORT 7

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    VISHAY’S BLUE CHIP CUSTOMERS AND DISTRIBUTORS ABB® Continental® Hella® Plexus® United Technologies® Apple® Delphi® Honeywell® Quanta® Valeo® Arrow® Delta® Huawei™ Rutronik® Weikeng Asus ® Denso ® Jabil ® Samsung ® Wistron® Avnet® Digi-Key® Keboda® Sanmina® WPG® BAE Systems® Ericsson® LG Electronics® Schneider™ ZF® Group Bosch® Flex® Lite-On® Seagate® …and others Boston Scientific ® Foxconn ® Magneti Marelli ® Siemens ® BYD® Future® Medtronic® Sony® Celestica® General Electric® Nexty Tesla® Cisco® Harman® Philips® TTI® RECENT INDUSTRY DRIVING AWARDS STOCKHOLDER Continental 2017 Supplier of the Year Award VALUE Delphi Automotive Pinnacle Awards for Supplier Excellence Vishay is firmly committed to driving Siemens 2017 SEWC Best Cooperation Supplier Award stockholder value. It accomplishes FLEX 2017 Preferred Supplier Award this through organic growth that is TTI Supplier Excellence Awards: The Americas, Europe, and Asia supplemented by targeted acquisitions, Aspencore 2018 China World Electronics Achievement Award a regular cash dividend program, and 2018 Top 10 Power Product Award opportunistic stock buybacks, while at the same time maintaining a prudent ECN IMPACT Award capital structure. Vishay continues 2017 ACE (Annual Creativity in Electronics) Award to be a reliable generator of “free SPDEI (French Association of Distributors of Electronic cash” (the amount of cash generated Components) Top Supplier Award from operations in excess of capital EDN Hot 100 Product Award expenditures and net of proceeds Electronic Products Product of the Year Award from the sale of assets). Vishay has Selezione di Elettronica Innovation Award consistently generated in excess of $200 million in cash from operations in each of Electronic Products China Top-10 Power Product Award the past seventeen years. Electronic Design Top 101 Components 8 Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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    CORPORATE INFORMATION BOARD OF DIRECTORS EXECUTIVE OFFICERS STOCKHOLDER ASSISTANCE MARC ZANDMAN MARC ZANDMAN For information about stock transfers, Executive Chairman of the Board Executive Chairman of the Board dividend payments, address changes, Chief Business Development Officer Chief Business Development Officer account consolidation, registration changes, Vishay Intertechnology, Inc. lost stock certificates, and Form 1099, DR. GERALD PAUL please contact the Company’s Transfer MICHAEL J. CODY President Agent and Registrar. Retired Vice President of Chief Executive Officer Corporate Development JOHAN VANDOORN TRANSFER AGENT AND REGISTRAR Raytheon Company Executive Vice President American Stock Transfer & Trust Company DR. ABRAHAM LUDOMIRSKI Chief Technical Officer 59 Maiden Lane Founder and Managing Director of Vitalife Deputy to the CEO New York, NY 10038 Fund, a venture capital company specializing Phone: 800.937.5449 LORI LIPCAMAN in high tech electronic medical devices Fax: 718.921.8331 Executive Vice President Email: info@amstock.com FRANK D. MAIER Chief Financial Officer For other information or questions, Retired Managing Director DAVID VALLETTA please contact Investor Relations TEMIC GmbH Executive Vice President at 610.644.1300. DR. GERALD PAUL Worldwide Sales President COMMON STOCK CLARENCE TSE Chief Executive Officer Ticker symbol: VSH Executive Vice President Vishay Intertechnology, Inc. The common stock is listed and principally Business Head Semiconductors traded on the New York Stock Exchange. RONALD M. RUZIC JOEL SMEJKAL Retired Group President Executive Vice President DUPLICATE MAILINGS BorgWarner Automotive, Inc. Business Head Passive Components If you receive more than one Annual Report ZIV SHOSHANI and Proxy Statement and wish to help us WERNER GEBHARDT President reduce costs by discontinuing multiple Executive Vice President Chief Executive Officer mailings, please contact our Transfer Agent Human Resources Vishay Precision Group, Inc. American Stock Transfer & Trust Company. TIMOTHY V. TALBERT Retired Senior Vice President CORPORATE OFFICE ELECTRONIC PROXY MATERIALS You can receive Vishay Intertechnology’s Credit and Originations Lease Vishay Intertechnology, Inc. Annual Report and proxy materials Corporation of America (“LCA”) 63 Lancaster Avenue electronically, which will give you immediate Retired President Malvern, PA 19355-2120 access to these materials, and will save LCA Bank Corporation Phone: 610.644.1300 the Company printing and mailing costs. Fax: 610.296.0657 THOMAS C. WERTHEIMER If you are a registered holder (you own the www.vishay.com Accounting Consultant, previously partner stock in your name), and wish to receive your proxy materials electronically, please of PricewaterhouseCoopers LLP ANNUAL MEETING go to www.icsdelivery.com/vsh. If you are a RUTA ZANDMAN May 14, 2019 at 9:30 a.m. street holder (you own this stock through a Private Stockholder Vishay Intertechnology, Inc. bank or broker), please contact your broker Vishay Intertechnology, Inc. Auditorium and ask for electronic delivery of Vishay RAANAN ZILBERMAN 63 Lancaster Avenue Intertechnology’s proxy materials. Former President and Malvern, PA 19355-2120 Chief Executive Officer Caesarstone Ltd. HONORARY EXECUTIVE CHAIRMAN OF THE BOARD Dr. Felix Zandman (Deceased June 4, 2011) Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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    CORPORATE HEADQUARTERS VISHAY INTERTECHNOLOGY, INC. 63 Lancaster Avenue Malvern, PA 19355-2120 United States 610.644.1300 www.vishay.com © Copyright 2019 Vishay Intertechnology, Inc. ® Registered trademarks of Vishay Intertechnology, Inc., and other parties. All rights reserved. 4 Vishay Intertechnology, Inc. 2018 ANNUAL REPORT

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