Vishay Intertechnology
Annual Report 2023

Plain-text annual report

VISHAY INTERTECHNOLOGY, INC. A N N U A L R E P O R T 2 0 2 3 FROM THE EXECUTIVE CHAIRMAN In 2023, with the appointment of Joel Smejkal and a new executive leadership team, Vishay entered the next chapter in its 60+ year history. After a period of financial stewardship, the Board took the necessary steps to reorient the organization toward profitable growth. Under Joel’s leadership, Vishay has embarked on a multi-year plan to invest $1.2 billion in expanding capacity and in next-generation technologies. The goal of these investments is to position Vishay to capitalize on the megatrends in e-mobility, sustainability, and connectivity. In its first year at the helm, the executive leadership team has already accomplished a great deal and cultural change is evident across the organization. Vishay has: • Increased capacity • Opened two new facilities • Advanced expansion projects • Engaged with customers • Invested in innovation Vishay is becoming a company that puts customers first and makes business-minded decisions, moving away from its production-focused past. With these changes, Vishay is now focused on growth and profitability. On behalf of the Board of Directors, I want to express my steadfast commitment to deploying Vishay’s strong balance sheet to invest in our multi-year plans, and support for the strategic shift underway. I am confident that Joel and the executive leadership team will deliver enhanced stockholder value over time while continuing to maintain cash available for our Stockholder Return Policy. Executive Chairman of the Board of Directors Marc Zandman Vishay Intertechnology, Inc. 2 FROM THE PRESIDENT & CEO It’s been a remarkable year of change at Vishay as we began to implement our strategy to become a customer-first, business-minded, and growth-oriented company. Across the company, we are reshaping our operations, sales, marketing, finance, and human resources. We invested in capacity expansion to be proactive and to meet the demand of our customers in the coming upturn. It is this customer-focused and business-minded approach that is creating a new Vishay. During 2023, we implemented and made significant progress on multiple initiatives to set the stage for faster revenue growth, margin expansion, and enhanced returns. A top priority was to start adding incremental capacity, both internally and externally, to support our highest growth and highest margin product lines to be ready to capitalize on the megatrends of e-mobility, sustainability, and connectivity. We increased annualized capacity by about 13%, particularly for power inductors, resistors, and capacitors, as much of our 2022 capital expenditures came online. Internally, we invested $329 million in capex, about two-thirds of which was spent on expansion projects. These expansion projects included: • Semiconductor wafer fabs located in Itzehoe, Taipei, and Turin, to meet the growing long term demand from our automotive and industrial customers • A facility in La Laguna Mexico, which we opened in the fourth quarter of 2023. This site’s initial focus is to manufacture power inductors. We plan to establish a campus at the La Laguna facility to bring together product lines from other Vishay business segments • An expansion in Juarez, Mexico, which increases the manufacturing capacity for our Power Metal Strip® resistors In parallel to the construction of our new 12-inch MOSFET fab in Itzehoe, Germany, we took additional steps to bridge the lack of capacity in MOSFETs for our automotive and industrial customers. These steps included expanding our supply agreements with two of our existing foundry partners to gain more wafer capacity as well as signing a long term supply agreement with SK keyfoundry to supply wafers for multiple power MOSFET products. A TOP PRIORITY WAS TO START ADDING INCREMENTAL CAPACITY, both internally and externally, to support our highest growth and highest margin product lines to be ready to capitalize on the megatrends of e-mobility, sustainability, and connectivity. 2023 Annual Report 3 FROM THE PRESIDENT & CEO To create available internal capacity for our high growth and high return products, we began to implement subcontractor initiatives to outsource production of some commodity products. By year-end, we had qualified fourteen different product families of resistors and inductors, bringing on additional capacity to support a widening of our portfolio. In terms of product innovation, another priority was to advance our silicon carbide capabilities. Following the October 2022 acquisition of MaxPower, we advanced the development of our silicon carbide technology, releasing samples of our 1200 V planar technology MOSFETs while continuing to work on the 1200 V dual Trench technology, the 1700 V planar technology, and the 650 V planar technology. The next step toward commercialization of silicon carbide MOSFETs and diodes was acquiring the Newport wafer fab in March 2024 for $177 million in cash. With Newport, we will add an automotive qualified, 8-inch semiconductor fab located in the heart of a compound semiconductor cluster in South Wales, UK. At Newport, we plan to develop and scale our silicon carbide capabilities and to develop our GaN technology. We launched our strategy to enhance channel management and maximize the profitability of each channel. As an example, we are better positioning Vishay by adding part numbers on the shelves of our distributors, a channel we underserved for many years due to capacity constraints. With capacity increasing, we are in a position to assure our presence on the shelf even during market upturns. Each of our business units is actively engaged with our distribution partners in each region to identify a broader part number mix by technology. We started to introduce Vishay solutions, leveraging our broad portfolio of discrete semiconductors and passives. During the year, we released automotive reference designs for customer engineers to evaluate. The first solutions were a high voltage intelligent battery sensor; a 48 V eFuse; and a 12 V / 48 V DC/DC converter. In closing, a strategic shift that involves all business functions, global operations, and thousands of employees energizes the organization and brings a cultural change. I want to express my deepest appreciation to all the Vishay employees for their enthusiasm about the new Vishay and their energy and commitment to creating a bright future for the company and themselves. The culture of putting the customer first has taken hold. Customers are excited about the actions of the new Vishay. We engage the OEMs, EMS, and distribution partners on a more frequent basis because we are successfully investing in incremental capacity to help them scale. We are becoming a business-minded organization, making decisions based on customer needs and market dynamics. We are collectively looking forward to capturing the opportunities created by the megatrends of e-mobility, sustainability, and connectivity to drive faster revenue growth and higher returns. President and CEO Joel Smejkal 4 Vishay Intertechnology, Inc. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒☒☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 1-7416 Vishay Intertechnology, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 38-1686453 (IRS employer identification no.) 63 Lancaster Avenue Malvern, Pennsylvania 19355-2143 (Address of principal executive offices) (610) 644-1300 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Common stock, par value $0.10 per share Trading symbol VSH Name of exchange on which registered New York Stock Exchange LLC Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒☒☒☒ No ☐ Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒☒☒☒ Note – Checking the box above will not relieve any registrant required to file reports under Section 13 or 15(d) of the Exchange Act from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒☒☒☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒☒☒☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Non-accelerated filer ☒☒☒☒ Accelerated filer ☐ Smaller reporting company Emerging growth company ☐ ☐☐☐☐ ☐☐☐☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐☐☐☐ No ☒☒☒☒ The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter ($29.40 on July 1, 2023), assuming conversion of all of its Class B common stock held by non-affiliates into common stock of the registrant, was $3,764,000,000. There is no non-voting stock outstanding. As of February 14, 2024, registrant had 125,408,100 shares of its common stock (excluding treasury stock) and 12,097,148 shares of its Class B common stock outstanding. Portions of the registrant’s definitive proxy statement, which will be filed within 120 days of December 31, 2023, are incorporated by reference into Part III. DOCUMENTS INCORPORATED BY REFERENCE This page intentionally left blank. Vishay Intertechnology, Inc. Form 10-K for the year ended December 31, 2023 CONTENTS PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 1C. Cybersecurity Item 2. Properties Item 3. Legal Proceedings Item 4. Mine Safety Disclosures Information About Our Executive Officers PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III Item 10. Directors, Executive Officers, and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services PART IV Item 15. Exhibits, Financial Statement Schedules Item 16. Form 10-K Summary SIGNATURES Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2023 and 2022 Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021 Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022, and 2021 Notes to the Consolidated Financial Statements 4 15 24 24 25 27 27 28 29 30 31 58 60 60 60 62 62 62 62 62 62 62 63 66 67 F-2 F-4 F-6 F-7 F-8 F-9 F-10 3 Item 1. BUSINESS Our Business PART I Vishay Intertechnology, Inc. (“Vishay,” the “Company,” “we,” “us,” or “our”) manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that support innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets. Serving customers worldwide, Vishay brands itself as The DNA of tech.™ Semiconductors include MOSFETs, diodes, and optoelectronic components. Passive components include resistors, inductors, and capacitors. Our semiconductor components are used for a wide variety of functions, including power control, power conversion, power management, signal switching, signal routing, signal blocking, signal amplification, two-way data transfer, one-way remote control, and circuit isolation. Our passive components are used to restrict current flow, suppress voltage increases, store and discharge energy, control alternating current (“AC”) and voltage, filter out unwanted electrical signals, and perform other functions. The Vishay Story For over six decades we have been building what we call The DNA of tech.TM The Vishay journey began with one man, the late Dr. Felix Zandman, and a revolutionary technology. In the 1950’s, Dr. Felix Zandman was issued patents for his PhotoStress® coatings and instruments, used to reveal and measure the distribution of stresses in structures such as airplanes and cars under live load conditions. His research in this area led him to develop Bulk Metal® foil resistors – ultra-precise, ultra-stable resistors with performance exceeding any other resistor available to date. In 1962, Dr. Zandman, with a loan from the late Alfred P. Slaner, founded Vishay to develop and manufacture Bulk Metal foil resistors. Concurrently, J.E. Starr developed foil resistance strain gages, which also became part of Vishay. Throughout the 1960’s and 1970’s, Vishay established itself as a technical and market leader in foil resistors, PhotoStress products, and strain gages. From that beginning, we grew and strengthened our business both organically and through strategic passive component acquisitions beginning in 1985 and semiconductor acquisitions beginning in the late 1990’s. From discrete semiconductors to passive components; from the smallest diode to the most powerful capacitor, Vishay manufactures a breadth of products which we call The DNA of tech.™ Through R&D, manufacturing, engineering, quality, sales and marketing, we generate a variety of components that support inventors and innovators creating new generations of products spanning many sectors: automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical. Together with major manufacturers of electronic products worldwide, we are supporting next level automation in multiple areas, including factories, the electrification of the automobile, 5G network technology, and the rapid expansion of connectivity across everything (IoT). We continue to implement Dr. Zandman’s vision, strategy, and culture as we work tirelessly to enhance value for our stockholders. Vishay was incorporated in Delaware in 1962 and maintains its principal executive offices at 63 Lancaster Avenue, Malvern, Pennsylvania 19355-2143. Our telephone number is (610) 644-1300. 4 Our Competitive Strengths Global Technology Leader As industry evolves, The DNA of tech™ evolves. We were founded based on the inventions of Dr. Felix Zandman and we continue to emphasize technological innovation as a driver of growth. Many of our products and manufacturing techniques, technologies, and packaging methods have been invented, designed, and developed by Dr. Zandman, our engineers, and our scientists. Our components today are smaller, faster, and more reliable than in the past, helping our customers to be more inventive and evolve their businesses. Our components are used by virtually all major manufacturers of electronic products worldwide in the automotive, industrial, computing, consumer, telecommunications, military and aerospace, and medical markets. They are found inside products and systems used every day, from automobiles to airplanes, power grids, phones, and pacemakers. We are currently a worldwide technology and market leader in wirewound and other power resistors, leaded film resistors, thin film SMD resistors, power inductors, wet and conformal-coated tantalum capacitors, capacitors for power electronics, power rectifiers, low-voltage power MOSFETs, and infrared components. Research and Development Provides Customer-Driven Growth Solutions We maintain strategically placed application and product support centers where proximity to customers and our manufacturing locations enables us to more easily gauge and satisfy the needs of local markets. The breadth of our product portfolio along with the proximity of our field application engineers to customers provides increased opportunities to have our components selected and designed into new end products by customers in all relevant market segments. We also maintain research and development personnel and promote programs at a number of our production facilities to develop new products and new applications of existing products, and to improve manufacturing processes and technologies. We plan to grow our business and increase earnings per share, in part, through accelerating the development of new products and technologies and increasing design-in opportunities by expanding our technical resources for providing solutions to customers. Operational Excellence We are a leading manufacturer in our industry, with a broad product portfolio, access to a wide range of end markets and sales channels, and geographic diversity. We have solid, well-established relationships with our customers and strong distribution channels. Our senior management team is highly experienced, with deep industry knowledge. Over the past two decades, our management team has successfully restructured our company and integrated several acquisitions. We can adapt our operations to changing economic conditions, as demonstrated by our ability to remain profitable and generate cash through the volatile economic cycle of the recent past. Broad Market Penetration We have one of the broadest product lines of discrete semiconductors and passive components among our competitors. Our broad product portfolio allows us to penetrate markets in all industry segments and all regions, which reduces our exposure to a particular end market or geographic location. We plan to grow our business and increase earnings per share, in part, through improving market penetration by expanding manufacturing facilities for our most successful products, increasing technical resources, and developing markets for specialty products in Asia. Over the next few years, we expect to experience higher growth rates than over the last decade. This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, and 5G infrastructure. See Note 15 to our consolidated financial statements for net revenues by region and end market. Strong Track Record of Growth through Acquisitions Since 1985, we have expanded our product line through various strategic acquisitions, growing from a small manufacturer of precision resistors and resistance strain gages to one of the world’s largest manufacturers and suppliers of a broad line of electronic components. We have successfully integrated the acquired companies within our existing management and operational structure, reducing selling, general, and administrative expenses through the integration or elimination of redundant sales and administrative functions, creating manufacturing synergies, while improving customer service. We plan to grow our business and increase earnings per share, in part, through targeted acquisitions. We have often targeted high margin niche business acquisitions. We also target strategic acquisitions of businesses with technology and engineering capabilities that we can further develop and commercialize to grow our business and key niche suppliers that allow us to vertically integrate our supply chain. Strong Free Cash Flow Generation We refer to the amount of cash generated from operations in excess of our capital expenditure needs and net of proceeds from the sale of assets as “free cash” (see "Overview" included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for "free cash" definition and reconciliation to generally accepted accounting principles ("GAAP")). Due to our strong operational management, cost control measures, efficient capital expenditures, broad product portfolio, and strong market position, we have generated positive “free cash” in each of the past 27 years. Our aggressive capital expenditure plans for 2023 - 2025 have limited and will limit "free cash" generation over that time frame. Financial Strength and Flexibility As of December 31, 2023, our cash and short-term investment balance exceeded our debt balance by $190.3 million. We also maintain a credit facility, which provides a revolving commitment of up to $750 million through May 8, 2028, of which substantially all was available as of December 31, 2023. Our net cash position and short-term investment balance, available revolving commitment, and “free cash” flow generation provide financial strength and flexibility and reduce our exposure to future economic uncertainties. 5 Our Key Challenges Economic Environment Our business and operating results have been and will continue to be impacted by the global economy and the local economies in which our customers operate. Our revenues are dependent on end markets that are impacted by fluctuating consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those markets. Competition Our business is highly competitive worldwide, with low transportation costs and few import barriers. Our major competitors, some of which are larger than us, have significant financial resources and technological capabilities. To continue to grow our business successfully, we need to continually develop, introduce, and market new and innovative products, modify existing products, respond to technological change, and customize certain products to meet customer requirements. Continuous Innovation and Protection of Intellectual Property Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have licenses to use numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued. Continuing to Grow through Acquisitions Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of growth through acquisitions. For this strategy to remain successful, we need to continue to identify attractive and available acquisition candidates, complete acquisitions on favorable terms, and integrate new businesses, manufacturing processes, employees, and logistical arrangements into our existing management and operating infrastructure. Supply Chain Disruption The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party contractors, shipping partners, distributors, and end market customers. Our production and results of operations can be negatively impacted by disruptions to any part of the supply chain, many of which are beyond our control. We remain cognizant of these challenges and seek to minimize their effects whenever possible. For a more detailed discussion, see "Supply Chain" below. For a more detailed discussion of the risks and uncertainties inherent in our business, which could materially and adversely affect our business, results of operations or financial condition, see “Risk Factors” in Item 1A. 6 Key Business Strategies Our business strategy principally consists of the following elements: Think Customer First We maintain significant production facilities in those regions where we market the bulk of our products in order to enhance the service and responsiveness that we provide to our customers. We aim to further strengthen our relationships with customers and strategic partners by providing broad product lines that allow us to provide “one-stop shop” service, whereby they can streamline their design and purchasing processes by ordering multiple types of products, by anticipating customer needs, and supporting increasing customer demand. Invest in Innovation to Drive Growth We plan to continue to use our research and development (“R&D”), engineering, and product marketing resources to continually roll out new and innovative products. As part of our plan to foster intensified internal growth, we have increased our worldwide R&D and engineering technical staff, and increased our technical field sales force in Asia to increase opportunities to design-in our products in local markets. Our ability to react to changing customer needs and industry trends will continue to be key to our success. We intend to leverage our insights into customer demand to continually develop new innovative products within our existing lines and to modify our existing core products to make them more appealing, addressing changing customer needs and industry trends. We are directing increased funding and are focusing on developing products to capitalize on the mega trends of electrification, data storage, and wireless communications that are critical to our future success. We are also investing in additional capital expenditures to expand key product lines. Over the next few years, we expect to experience higher growth rates than over the last decade. This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, and 5G infrastructure. Growth through Strategic Acquisitions We plan to continue to expand within the electronic components industry, through the acquisition of other manufacturers of electronic components that have established positions in major markets, reputations for product innovation, quality, and reliability, strong customer bases, and product lines with which we have substantial marketing and technical expertise. It also includes certain businesses that possess technologies which we expect to further develop and commercialize and key niche suppliers that allow us to vertically integrate our supply chain. Cost Management We place a strong emphasis on controlling our costs. We focus on controlling fixed costs and reducing variable costs. When our ongoing cost management activities are not adequate, we take actions to maintain our cost competitiveness including restructuring our business to improve efficiency and operating performance. Our growth plan was designed based on the tenets of the key business strategies listed above. Products We design, manufacture, and market electronic components that cover a wide range of functions and technologies. Our products include commodity, non- commodity, and custom products in which we believe we enjoy a good reputation and strong brand recognition, including our Siliconix, Dale, Draloric, Beyschlag, Sfernice, MCB, UltraSource, Applied Thin-Film Products, IHLP®, HiRel Systems, Sprague, Vitramon, Barry, Roederstein, ESTA, and BCcomponents brands. We promote our ability to provide “one-stop shop” service to customers, whereby they can streamline their design and purchasing processes by ordering multiple types of products from Vishay. Our technical sales force consisting of field application engineers offers customers the complete breadth of the Vishay portfolio for their applications. We aim to use this broad portfolio to increase opportunities to have our components selected and “designed in” to new end products. We consider any product which is completely interchangeable with a competitor’s product to be a “commodity product.” Commodity products serve many markets. For 2023, commodity products comprised 31% of our revenues. We consider any of our standard products that may be sold to multiple customers, which is not completely interchangeable with a competitor’s product, to be a “non-commodity” product. Non-commodity products generally have a small number of competitors who have similar, but not exact, products. Non-commodity products typically serve a particular end-use market. For 2023, non-commodity products comprised 47% of our revenues. We also sell several custom products. Usually, a custom product is designed for a specific customer, and such part number is sold to only that customer. For 2023, custom products comprised 22% of our revenues. We evaluate our level of product innovation by measuring how much of our revenue is derived from products developed in the previous five years. Products for certain end-use markets, particularly the automotive market, tend to have longer product life cycles, which may impact these metrics. Approximately 25% of our annual revenues are generated by products that were developed in the previous five years. Product Segments Our products can be divided into two general classes: semiconductors and passive components. Semiconductors are sometimes referred to as “active components” because they require power to function whereas passive components do not require power to function. Our semiconductor and passive components products are further categorized based on their functionality for financial reporting purposes. 7 Semiconductors Our semiconductor products include metal oxide semiconductor field-effect transistors ("MOSFETs"), diodes, and optoelectronic components. Semiconductors are typically used to perform functions such as switching, amplifying, rectifying, routing, or transmitting electrical signals, power conversion, and power management. MOSFETs Segment MOSFETs function as solid state switches to control power. Our MOSFETs business includes both the commodity and non-commodity markets in which we believe that we enjoy a good reputation and strong brand recognition (Siliconix). MOSFETs applications include mobile phones, notebook and desktop computers, tablet computers, digital cameras, televisions, DC/DC and AC/DC switch mode power supplies, solar inverters, automotive and industrial systems. We are a leader in low-voltage TrenchFET MOSFETs and also offer high-voltage MOSFETs. Our MOSFETs product line includes low- and medium-voltage TrenchFET MOSFETs, high-voltage planar MOSFETs, high voltage Super Junction MOSFETs, power integrated circuits (power ICs), and integrated function power devices. We are one of the technology leaders in MOSFETs, with a tradition of innovation in wafer design, packaging, and performance. Our acquisition of MaxPower Semiconductor, Inc. on October 28, 2022 adds leading edge silicon and silicon carbide technology to our MOSFETs product line. Our pending acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment. In 2023, commodity products comprised 45% of our annual MOSFETs segment revenues. Non-commodity products comprised 42% of our annual MOSFETs segment revenues. Custom products comprised 13% of our annual MOSFETs segment revenues. Approximately 30% of our annual MOSFETs segment revenues were generated by products that were developed in the previous five years. Diodes Segment Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering. Our Diodes business is a solid business with a strong market presence in both the commodity and non-commodity markets. The products that comprise our Diodes business represent our broadest product line and include rectifiers, small signal diodes, protection diodes, thyristors/SCRs and power modules. The primary application of rectifiers, found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC supply. Vishay is the worldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumer markets. Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power loss and improves the efficiency of end systems and eSMP®, the best in class high-current density surface mount packages. Our wide selection of small signal diodes consist of the following functions: switching, tuning, band-switching, RF attenuation and voltage regulation (Zener). They are available in various glass and plastic packaging options and generally are used in electronic circuits, where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage suppressor) diodes. The portfolio of protection diodes includes ESD protection and EMI filter. Our thyristors or SCR (silicon-controlled rectifiers) are very popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EV are the focus of our power modules business (IGBT or MOSFET modules). These modules can be customized to fit in different customer design requirements. In 2023, commodity products comprised 55% of our annual Diodes segment revenues. Non-commodity products comprised 26% of our annual Diodes segment revenues. Custom products comprised 19% of our annual Diodes segment revenues. Approximately 30% of our annual Diodes segment revenues were generated by products that were developed in the previous five years. Optoelectronic Components Segment Optoelectronic components emit light, detect light, or do both. Our Optoelectronic Components business has a strong market presence in both the commodity and non-commodity markets. Our broad range of standard and customer specific optoelectronic components includes infrared (“IR”) emitters and detectors, IR remote control receivers, optocouplers, solid-state relays, optical sensors, light-emitting diodes (“LEDs”), 7-segment displays, and IR data transceiver modules (IrDA®). Our IR remote control receivers are designed for use in infrared remote control, data transmission, and light barrier applications in end products including televisions, set-top boxes, notebook computers, and audio systems. We are the leading manufacturer of IR remote control receivers. Our optocouplers electrically isolate input and output signals. Uses include switch-mode power supplies, consumer electronics, telecommunications equipment, solar inverters, and industrial systems. Our IR data transceiver modules are used for short range, two-way, high-speed, and secure wireless data transfer between electronic devices such as home medical appliances, mobile phones, industrial data loggers, and metering. Our optical sensors product line was considerably strengthened by our acquisition of Capella in 2014. Our optical sensors products include ambient light sensors, optical encoders, integrated photodiode and I/V amplifiers, proximity sensors, color sensors, and UV sensors. Applications include telecommunications, mobile phones, smartphone, handheld devices, digital cameras, laptops, desktop computers, LED backlighting, office automation equipment, household electrical appliance and automotive electronics. Our LEDs are designed for backlighting and illumination in automotive and other applications. Our LEDs include ultra-bright as well as small surface-mount packages, with products available in all standard colors including white. All of our Optoelectronic Components segment products are non-commodity or custom products. Approximately 25% of our annual Optoelectronic Components segment revenues were generated by products that were developed in the previous five years. 8 Passive Components Our passive components include resistors, inductors, and capacitors. Passive components are used to store electrical charges, to limit or resist electrical current, and to help in filtering, surge suppression, measurement, timing, and tuning applications. Resistors Segment Resistors impede electric current. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. Our Resistors business is our original business. We maintain the broadest portfolio of resistor products worldwide. Under current market conditions, the business is solid, predictable, and growing at relatively stable selling prices. We are a market leader with a strong technology base, many specialty products, and strong brand recognition (such as our Dale, Draloric, Beyschlag, and Sfernice brands). We focus on higher value markets in specialized industries, while maintaining a complete portfolio of commodity products. We do not aim to be the volume leader in commodity markets. Resistors vary widely in precision and cost, and are manufactured from numerous materials and in many forms. Linear resistive components are classified as variable or fixed, depending on whether or not their resistance is adjustable. Non-linear resistors function by varying in resistance under influence of temperature (thermistors) or voltage (varistors). They can be used in temperature-measuring applications or as current or voltage-limiting devices. We manufacture virtually all types of fixed resistors, both in discrete and network forms, as well as many variable types. Vishay resistor innovations include Power Metal Strip® technology. These resistors feature very low resistance and are used to measure changes in current flow (current sensing) or divert current flow (shunting). In 2023, commodity products comprised 19% of our annual Resistors segment revenues. Non-commodity products comprised 53% of our annual Resistors segment revenues. Custom products comprised 28% of our annual Resistors segment revenues. Approximately 15% of our annual Resistors segment revenues were generated by products that were developed in the previous five years. Inductors Segment Inductors also impede electric current. Inductors use an internal magnetic field to change alternating current phase and resist alternating current. While part of our traditional business, the inductors product line has grown significantly in recent years. We are a market leader with a strong technology base, many specialty products, and strong name recognition (such as our IHLP® and HiRel Systems brands). We focus on higher value markets in specialized industries, such as the industrial, automotive, military, and medical end markets. Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage. Vishay inductor innovations include our patented IHLP low-profile, high-current inductor technology with industry-leading specifications. Our low-profile, high-current inductors save circuit board space and power in voltage regulator module (“VRM”) and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions focusing on high performance and high reliability. Substantially all of our Inductors segment products are non-commodity or custom products. Approximately 15% of our annual Inductors segment revenues were generated by products that were developed in the previous five years. Capacitors Segment Capacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-quality products. We have a strong presence worldwide in specialty markets based on our product performance and reliability and strong brand recognition (including our Sprague, Vitramon, Roederstein, BCcomponents, and ESTA brands). We focus on higher value markets in specialized industries, while maintaining a complete portfolio of commodity products. We do not aim to be the volume leader in commodity markets. Capacitors are used in almost all electronic circuits. They store energy and discharge it when needed. Important applications for capacitors include electronic filtering for linear and switching power supplies; decoupling and bypass of electronic signals for integrated circuits and circuit boards; and frequency control, timing and conditioning of electronic signals for a broad range of applications. We manufacture products based on all major capacitor technologies: tantalum (molded chip tantalum, coated chip tantalum, solid through-hole tantalum, wet tantalum, and polymer), ceramic (multilayer chip and ceramic disc), film, power, heavy-current, and aluminum electrolytic. Our capacitors range from tiny surface- mount devices for hearing aids and mobile devices to large power correction capacitors used in renewable energy, heavy industry, and electrical power grids. We are a recognized technology leader in many product ranges, securing our strong position in military and medical markets, and in a wide range of industrial and automotive applications. Our wet tantalum and MicroTan™ technologies are market leaders. In 2023, commodity products comprised 28% of our annual Capacitors segment revenues. Non-commodity products comprised 48% of our annual Capacitors segment revenues. Custom products comprised 24% of our annual Capacitors segment revenues. Approximately 30% of our annual Capacitors segment revenues were generated by products that were developed in the previous five years. 9 Military Qualifications We have qualified certain of our products under various military specifications approved and monitored by United States government agencies, and under certain European military specifications. Qualification levels are based in part upon the rate of failure of products. In order to maintain the classification level of a product, we must continuously perform tests on the product and the results of these tests must be reported to the government agencies. If the product fails to meet the requirements for the applicable classification level, the product’s classification may be reduced to a lower level. During the time that the classification level is reduced for a product with military application, net revenues and earnings attributable to that product may be adversely affected. Manufacturing Operations In order to better serve our customers, we maintain production facilities in locations where we market the bulk of our products, such as the United States, Germany, and Asia. To optimize production efficiencies, we have whenever practicable established manufacturing facilities in countries, such as India, Israel, Malaysia, Mexico, the People’s Republic of China, and the Philippines, where we can benefit from lower labor costs and also benefit from various government incentives, including tax relief. One of our most sophisticated manufacturing operations is the production of power semiconductor components. This manufacturing process involves two phases of production: wafer fabrication and assembly (or packaging). Wafer fabrication subjects silicon wafers to various thermal, metallurgical, and chemical process steps that change their electrical and physical properties. These process steps define cells or circuits within numerous individual devices (termed “dies” or “chips”) on each wafer. Assembly is the sequence of production steps that divides the wafer into individual chips and encloses the chips in structures (termed “packages”) that make them usable in a circuit. Both wafer fabrication and assembly phases incorporate wafer level and device level electrical testing to ensure that device design integrity has been achieved. In the United States, our manufacturing facilities are located in California, Connecticut, Massachusetts, Minnesota, Nebraska, New Hampshire, New York, Rhode Island, South Dakota, Vermont, and Wisconsin. In Asia, our main manufacturing facilities are located in the People’s Republic of China, the Republic of China (Taiwan), India, and Malaysia. In Europe, our main manufacturing facilities are located in Germany, France, and the Czech Republic. We have substantial manufacturing facilities in Israel. We also have manufacturing facilities in Austria, Dominican Republic, Japan, Hungary, Italy, Mexico, Portugal, and the Philippines. Over the past several years, we have invested substantial resources to increase the efficiency of our plants, which we believe will further reduce production costs. All of our manufacturing operations have received ISO 9001 certification. ISO 9001 is a comprehensive set of quality program standards developed by the International Standards Organization. Supply Chain The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party foundries and subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all other parts of the supply chain. Global shipping impacts several parts of the supply chain and the disruptions experienced in the recent years have, at times, negatively impacted our ability to manufacture products and to deliver them to customers. Although most materials incorporated into our products are available from a number of sources, certain materials, including plastics and metals, are produced in only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times, face capacity constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost of our supply. The unavailability or reduced availability of these materials could require us to temporarily cease or reduce production or incur additional costs. Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of these materials. Many of the metals used in the manufacture of our products, including gold, copper, and palladium, are traded on active markets and can be subject to significant price volatility. To ensure adequate supply and to provide cost certainty, our policy is to enter into short-term commitments to purchase defined portions of annual consumption of the raw materials utilized if market prices decline below budget. If after entering into these commitments, the market prices for these raw materials decline, we must recognize losses on these adverse purchase commitments. In certain circumstances, we also purchase precious metals bullion in excess of our immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations. Our production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources could require us to reduce production or incur additional costs. We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication and the assembly and testing of finished goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. Our agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require us to recognize losses on these adverse purchase commitments. Our agreements may limit our ability to increase production, particularly during periods of growing demand for our products. 10 Due to our global supply chain, we are impacted by global trade disputes. The governments of the U.S. and the People’s Republic of China remain in a trade dispute that has resulted in tariffs and other trade restrictions including import / export prohibitions. Disruptions to global trade could result in customers seeking different sources of product or requiring us to seek different sources of supply. New or revised trade agreements could require changes in operations in the long- term. We remain cognizant of these supply chain challenges and seek to minimize their effects whenever possible. Despite our best efforts, there can be no assurances we will be successful in mitigating these risks. Inventory and Backlog We manufacture both standardized products and those designed and produced to meet customer specifications. We maintain an inventory of standardized components and monitor the backlog of outstanding orders for our products. We include in our backlog only open orders that we expect to ship in the next twelve months. Many of our customers encounter uncertain and changing demand for their products. They typically order products from us based on their forecasts. If demand falls below customers’ forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments included in our backlog, in many instances without the payment of any penalty. Therefore, our backlog at any point in time is not necessarily indicative of the results to be expected for future periods. Customers and Marketing We sell our products to original equipment manufacturers (“OEMs”), electronic manufacturing services (“EMS”) companies, which manufacture for OEMs on an outsourcing basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS companies. See Note 15 to our consolidated financial statements for net revenues by customer type. Our sales organizations are regionally based. While our sales and support procedures are typically similar across all regions, we remain flexible in our ability to offer programs tailored to our customers’ specific support requirements in each local area. The aim of our sales organizations is supporting our customers across all product lines, developing new design wins, negotiating contracts, and providing general commercial support as would normally be expected of a large multi-national sales force. We have an established Strategic Global Account program, which provides each of our top customers with a dedicated Strategic Global Account Manager. Our Strategic Global Account Managers are typically highly experienced salesmen or saleswomen who are capable of providing key customers with the coordination and management visibility required in a complex multi-product business relationship. They typically coordinate the sales, pricing, contract, logistic, quality, and other aspects of the customer’s business requirements. The Strategic Global Account Manager normally is the focal point of communication between Vishay and our main customers. We maintain a similar program for our strategic distributors as well. We work with our customers so that our products are incorporated into the design of electronic equipment at the earliest stages of development and to provide technical and applications support. In addition to our staff of direct field sales personnel, independent manufacturers’ representatives, and distributors, our Business Development group maintains teams of dedicated Field Application Engineers (“FAEs”) to assist our customers in solving technical problems and in developing products to meet specific customer application needs using our entire product portfolio to provide support for our customers’ engineering needs. Organized by market segment, our Business Development FAEs bring specific knowledge of component applications in their areas of expertise in the automotive, telecommunications, computer, consumer/entertainment, industrial, peripherals, digital consumer, and other market segments. With the ultimate goal of a Vishay “design-in” – the process by which our customers specify a Vishay component in their products – this program offers our customers enhanced access to all Vishay technologies while at the same time increasing design wins, and ultimately sales, for us. Most importantly, the process is closely monitored via a proprietary database developed by our Business Development group. Our database captures specific design activities and allows for real-time measurement of new business potential for our management team. Our top 30 customers have been relatively stable despite not having long-term commitments to purchase our products. With selected customers, we have signed longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customers represent approximately 68% of our total net revenues. No single customer comprised more than 10% of our total net revenues for 2023. In certain areas we also work with sales representatives. The commission expense for these sales representatives is not material. Research and Development Many of our products and manufacturing techniques, technologies, and packaging methods have been invented, designed, and developed by Dr. Felix Zandman, our engineers, and our scientists. We maintain strategically placed design centers where proximity to customers enables us to more easily gauge and satisfy the needs of local markets. These design centers are located predominantly in the United States, Germany, Italy, Israel, Ireland, the People’s Republic of China, France, and the Republic of China (Taiwan). We also employ research and development personnel and promote programs at a number of our production facilities to develop new products and new applications of existing products and to improve manufacturing processes and technologies. This decentralized system encourages product development at individual manufacturing facilities, closer to our customers. 11 Competition We face strong competition in various product lines from both domestic and foreign manufacturers. Our primary competitors by product type include: • MOSFETs: Infineon, ON Semiconductor, Renesas, STMicroelectronics, Toshiba. • Diodes: Diodes Inc., Nexperia, ON Semiconductor, Rohm, STMicroelectronics. • Optoelectronic Components: Broadcom, ON Semiconductor, Renesas, Toshiba. • Resistors: Bourns, KOA, Murata, Panasonic, Rohm, TDK-EPCOS, Yageo. • Inductors: Bourns, Cyntec, Murata, Panasonic, Taiyo Yuden, TDK-EPCOS, Yageo. • Capacitors: Kyocera, Murata, Nichicon, Panasonic, Taiyo Yuden, TDK-EPCOS, Yageo. There are many other companies that produce products in the markets in which we compete. Our competitive position depends on our ability to maintain a competitive advantage on the basis of product quality, know-how, proprietary data, market knowledge, service capability, technological innovation, business reputation, and price competitiveness. Our sales and marketing programs aim to compete by offering our customers a broad range of world-class technologies and products, superior global sales and distribution support, and a secure and multi-location source of product supply. There has been a considerable amount of consolidation activity in the electronic component industry, some of which involved our primary competitors. We view the industry consolidation as an opportunity for us to gain business as an independent second-source supplier. Patents and Licenses We have made a significant investment in securing intellectual property protection for our technology and products. We seek to protect our technology by, among other things, filing patent applications for technology considered important to the development of our business. We also rely upon trade secrets, unpatented know- how, continuing technological innovation, and the aggressive pursuit of licensing opportunities to help develop and maintain our competitive position. Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have been licensed under, numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued. We require all of our technical, research and development, sales and marketing, and management employees and most consultants and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information developed or made known to the entity or individual during the course of the entity’s or individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. Substantially all of our technical, research and development, sales and marketing, and management employees have entered into agreements providing for the assignment to us of rights to inventions made by them while employed by us. When we believe other companies are misappropriating our intellectual property rights, we vigorously enforce those rights through legal action, and we intend to continue to do so. See Item 3, “Legal Proceedings.” Although we have numerous United States and foreign patents covering certain of our products and manufacturing processes, no particular patent is considered individually material to our business. Human Capital As a global company, we collaborate internationally and celebrate the diversity of our local cultures.  Employees are encouraged to bring their unique perspectives, help identify opportunities to collaborate, and open themselves to the career development that comes from learning from others. As of December 31, 2023, we employed approximately 23,500 full time employees worldwide. Reflecting our global business, our executive management team and many leadership positions are dispersed throughout the world. 12 Employees by location are summarized as follows: United States People’s Republic of China Germany Israel Taiwan Czech Republic India Other Europe Other Americas Other Asia Total 2,400 7,300 2,300 2,300 2,000 1,200 1,000 1,600 1,500 1,900 23,500 Many of our employees outside the United States are members of workers councils or unions or otherwise subject to collective bargaining agreements. Employees at one small U.S. facility, representing less than 1% of our U.S. workforce, are represented by a trade union. We consider our relations with our employees positive, fair, and equitable. Our greatest assets are our employees, and our continued success depends on our ability to attract, retain, and develop high levels of talent across the organization. Each person and each role plays a critical role in our success. Vishay continuously invests in its people through diverse training offerings, networking opportunities, and a commitment to developing life and professional skills. Employee development programs offer individual and group learning to maintain profitable business growth while increasing speed and agility. Organizationally, Vishay continues to evolve and change to meet or exceed customer and market demands, requiring heightened collaboration and agility. We continue to embed a high-performance culture whereby employees are encouraged to surface ideas, employ continuous improvement attitudes, and work together to achieve our organizational goals. Training and communication efforts have been implemented to ensure all employees know what is expected of them. The first phase of implementing a global human capital management system was completed in late 2023 to support our international workforce's communication, development, and efficient business processes. During 2023, resources were added to lead the global functions of Talent Acquisition and Total Rewards to refine our focus on attracting and nurturing key talent. Incentive compensation programs have been revised to create a unified focus on profitable growth. Organizational and structural changes that have allowed us to flatten the organizational structure and redefine some leadership roles continue to be implemented. We empower our employees by pushing down decision-making, and in turn, we speed up decision-making across the organization. Regulatory Compliance We are required to comply with numerous regulations that are normal and customary to businesses in our industry and the jurisdictions in which we operate. These regulations relate to, among other things, environmental health and safety, procurement integrity, export control, government security regulations, employment practices, accuracy of records and the recording of costs, anti-corruption, and privacy. See Item 1A, “Risk Factors,” for additional discussion of such regulations and the potential consequences for non-compliance. Environmental Health and Safety We have adopted an Environmental Health and Safety Corporate Policy that commits us to achieve and maintain compliance with applicable environmental laws, to promote proper management of hazardous materials for the safety of our employees and the protection of the environment, and to minimize the hazardous materials generated in the course of our operations. This policy is implemented with accountability directly to the Board of Directors. In addition, our manufacturing operations are subject to various federal, state, and local laws restricting discharge of materials into the environment. We are involved in environmental remediation programs at various sites currently or formerly owned by us and our subsidiaries both within and outside of the U.S., in addition to involvement as a potentially responsible party (“PRP”) at Superfund sites. Certain obligations as a PRP have arisen in connection with business acquisitions. The remediation programs are on-going and the ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. See Item 3, “Legal Proceedings.” We are not involved in any pending or threatened proceedings that would require curtailment of our operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in material compliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledge of all past occurrences on sites that we currently occupy. More stringent environmental regulations may be enacted in the future, and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future. 13 With each acquisition, we attempt to identify potential environmental concerns and to minimize, or obtain indemnification for, the environmental matters we may be required to address. In addition, we establish reserves for specifically identified potential environmental liabilities. We believe that the reserves we have established are adequate. Nevertheless, we have in the past and may in the future inherit certain pre-existing environmental liabilities, generally based on successor liability doctrines. Although we have never been involved in any environmental matter that has had a material adverse impact on our overall operations, there can be no assurance that in connection with any past or future acquisition we will not be obligated to address environmental matters that could have a material adverse impact on our operations. Company Information and Website We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934. The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov. In addition, our company website can be found on the Internet at www.vishay.com. The website contains information about us and our operations. Copies of each of our filings with the SEC on Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports, access ir.vishay.com and click on “SEC Filings.” The following corporate governance related documents are also available on our website: • Corporate Governance Principles • Code of Business Conduct and Ethics • Code of Ethics for Financial Officers • Audit Committee Charter • Nominating and Corporate Governance Committee Charter • Compensation Committee Charter • • Director Stock Ownership Guidelines • Clawback Policy • Hedging-Pledging Policy • Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors • Related Party Transactions Policy Executive Stock Ownership Guidelines To view these documents, access ir.vishay.com and click on “Corporate Governance.” Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 14 Item 1A. RISK FACTORS From time to time, information provided by us, including but not limited to statements in this report, or other statements made by or on our behalf, may contain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those anticipated. Set forth below are important factors that could cause our results, performance, or achievements to differ materially from those in any forward-looking statements made by us or on our behalf. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks relating to our business Our business is cyclical and future periods of decline and increased demand are not predictable. The electronic component industry is highly cyclical and experiences periods of decline from time to time. We and others in the electronic components industry have experienced these conditions in the recent past and cannot predict when we may experience downturns in the future. Market conditions, such as during a decline in product demand on a global basis, could result in order cancellations and deferrals, lower average selling prices, and a material and adverse impact on our results of operations. These declines in demand are usually driven by market conditions in the end markets for our products, but may also result from distributors not appropriately managing their inventory levels. We may also experience intense demand for our products in periods of a rising economy and we may have difficulty expanding our manufacturing capacity to satisfy demand during such periods. Factors which could limit such expansion include delays in procurement of manufacturing equipment, shortages of skilled personnel, and physical constraints on expansion of our facilities. Changes in the demand mix, needed technologies, and these end markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and could adversely affect our operating results and financial condition. A slowdown in demand or recessionary trends in the global economy makes it more difficult for us to predict our future sales and manage our operations, and could adversely impact our results of operations. Capacity that we add during upturns in the business cycle may result in excess capacity during periods when demand for our products recede, resulting in inefficient use of capital which could also adversely affect us. A downturn in our business in general, or isolated to a particular sector, could require us to incur restructuring and severance charges and/or asset write-downs. We face significant challenges managing our capacity expansion strategy. As part of our strategy to drive growth and increase capacity, we are increasing internal capacity by investing $329 million in 2023 and plan to invest $1.2 billion total from 2023 to 2025 and plan to increase external capacity by outsourcing additional commodity products to subcontractors. Our capacity expansion plans include building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, a new power inductor site in Mexico, a resistor manufacturing expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy. Additionally, the planned transaction with Nexperia BV will add a wafer fabrication facility and operations in Newport, South Wales, U.K. There is no assurance that we will be able to close the transaction for the Nexperia wafer fabrication facility. There are demand-related risks associated with all growth initiatives. There are also inherent execution risks in building and starting new wafer fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase costs and negatively impact our operating results. The risks include, but are not limited to, the following: • • • • design and construction delays and cost overruns; issues installing and qualifying new equipment and ramping production; poor production process yields and reduced quality control; and insufficient personnel with requisite expertise and experience to operate the facilities. Our business may be adversely affected by the widespread outbreak of diseases and the mitigation efforts by governments worldwide to control their spread. We cannot predict when future disease outbreaks or pandemics will occur. The potential risks and effects of future disease outbreaks and the related economic impact that could have an adverse effect on our business include, but are not limited to: • • • • • • • • Adverse impact on our customers and supply channels; Decrease in sales, product demand and pricing and unfavorable economic and market conditions; Increased costs, including higher shipping costs due to reduced shipping capacity; Restrictions on our manufacturing, support operations or workforce, or similar limitations for our customers, vendors, and suppliers, that could limit our ability to meet customer demand; Potential increased credit risk if customers, distributors, and resellers are unable to pay us, or must delay paying their obligations to us; Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures could result in delays; Impact on our workforce/employees due to the spread of the virus and any shelter-in-place orders; and Cybersecurity risks as a result of extended periods of remote work arrangements. Such effects could result in us being required to record impairment charges related to our property and equipment, intangible assets, or goodwill. 15 In the past we have grown through successful integration of acquired businesses, but this may not continue. Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of expansion through acquisitions. Despite our plan to continue to grow, in part, through targeted acquisitions, we may be unable to continue to identify, have the financial capabilities to acquire, or successfully complete transactions with suitable acquisition candidates. The rapid consolidation that our industry has experienced may further decrease our ability to identify attractive opportunities for acquisition. We are subject to various U.S. and foreign competition laws and regulations that may affect our ability to complete certain acquisitions. Also, if an acquired business fails to operate as anticipated, cannot be successfully integrated with our other businesses, or we cannot effectively mitigate the assumed, contingent, and unknown liabilities acquired, our results of operations, financial condition, enterprise value, market value, and prospects could all be materially adversely affected. To remain successful, we must continue to innovate, and our investments in new technologies may not prove successful. Our future operating results are dependent on our ability to continually develop, introduce, and market new and innovative products, to modify existing products, to respond to technological change, and to customize certain products to meet customer requirements. There are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timely fashion to satisfy customer demands. If this occurs, we could lose customers and experience adverse effects on our financial condition and results of operations. In addition to our own research and development initiatives, we periodically invest in technology start-up enterprises, in which we may acquire a controlling or noncontrolling interest but whose technology would be available to be commercialized by us. There are numerous risks in investments of this nature including the limited operating history of such start-up entities, their need for capital, and their limited or absence of production experience, as well as the risk that their technologies may prove ineffective or fail to gain acceptance in the marketplace. Certain of our historical investments in start-up companies have not succeeded, and there can be no assurance that our current and future investments in start-up enterprises will prove successful. Our business and our results of operations are sensitive to supply chain disruptions. The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party foundries and subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all other parts of the supply chain. Global shipping impacts several parts of the supply chain and the disruptions experienced in recent years have, at times, negatively impacted our ability to manufacture products and to deliver them to customers. Although most materials incorporated into our products are available from a number of sources, certain materials, including plastics and metals, are produced in only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times, face capacity constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost of our supply. The unavailability or reduced availability of these materials could require us to temporarily cease or reduce production or incur additional costs. Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of these materials. Many of the metals used in the manufacture of our products, including gold, copper, and palladium, are traded on active markets and can be subject to significant price volatility. To ensure adequate supply and to provide cost certainty, our policy is to enter into short-term commitments to purchase defined portions of annual consumption of the raw materials utilized if market prices decline below budget. In certain circumstances, we purchase precious metals bullion in excess of our immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations. If after entering into these commitments or purchasing the metals bullion, the market prices for these raw materials decline, we must recognize losses on these adverse purchase commitments and metals bullion purchases. Our production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources could require us to reduce production or incur additional costs. We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication and the assembly and testing of finished goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. Our agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require us to recognize losses on these adverse purchase commitments. Our agreements may limit our ability to increase production, particularly during periods of growing demand for our products. Due to our global supply chain, we are impacted by global trade disputes. The governments of the U.S. and the People’s Republic of China remain in a trade dispute that has resulted in tariffs and other trade restrictions including import / export prohibitions. Disruptions to global trade could result in customers seeking different sources of product or requiring us to seek different sources of supply. New or revised trade agreements could require changes in operations in the long- term. We remain cognizant of these supply chain challenges and seek to minimize their effects whenever possible. Despite our best efforts, there can be no assurances we will be successful in mitigating these risks and if we are unable to do so, they may have material negative impacts on our business and results of operations. 16 Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology and to operate our business without infringing or violating the intellectual property rights of others. Protection of intellectual property often involves complex legal and factual issues. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies are covered by valid and enforceable patents or are effectively maintained as trade secrets. We have applied, and will continue to apply, for patents covering our technologies and products, as we deem appropriate. However, our applications may not result in issued patents. Also, our existing patents and any future patents may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. Others may independently develop similar or alternative technologies, design around our patented technologies, or may challenge or seek to invalidate our patents. Also, the legal system in certain countries in which we operate may not provide or may not continue to provide sufficient, intellectual property legal protections and remedies. Litigation regarding patent and other intellectual property rights is prevalent in the electronic components industry, particularly the discrete semiconductor sector. We have on occasion been notified that we may be infringing on patent and other intellectual property rights of others. In addition, customers purchasing components from us have rights to indemnification under certain circumstances if such components violate the intellectual property rights of others. Further, we have observed that in the current business environment, electronic component and semiconductor companies have become more aggressive in asserting and defending patent claims against competitors. We will continue to vigorously defend our intellectual property rights, and may become party to disputes regarding patent licensing and cross patent licensing. Although licenses are generally offered in such situations and we have successfully resolved these situations in the past, there can be no assurance that we will not be subject to future litigation alleging intellectual property rights infringement, or that we will be able to obtain licenses on acceptable terms. An unfavorable outcome regarding one of these matters could have a material adverse effect on our business and results of operations. We face intense competition in our business, and are susceptible to certain concentrations. Our business is highly competitive worldwide, with low transportation costs and few import barriers. We compete principally on the bases of product quality and reliability, availability, customer service, technological innovation, timely delivery, and price. Our ability to compete successfully also depends on elements out of our control. We face significant competition within each of our product segments from larger global manufacturers and smaller manufacturers focused on specific market niches. The electronic component industry has become increasingly concentrated and globalized in recent years as many of our primary competitors have been acquired. The acquiring companies, most of which are larger than us, have significant financial resources and technological capabilities. A material portion of our revenues are derived from the worldwide industrial, automotive, telecommunications, and computing markets. These markets have historically experienced wide variations in demand for end products. If demand for these end products should decrease, the producers thereof could reduce their purchases of our products, which could have an adverse effect on our results of operations and financial position. While no customer comprises over 10% of our consolidated net revenues, certain subsidiaries and product lines are susceptible to customer concentrations and have customers which comprise greater than 10% of the subsidiary’s or product line’s net revenues. The loss of one of these customers could have a material effect on the results of operations of the subsidiary or product line and financial position of the subsidiary, which could result in an impairment charge which could be material to our consolidated financial statements. Our backlog is subject to customer cancellation. Many of the orders that comprise our backlog may be canceled by our customers without penalty. Our customers may on occasion double and triple order components from multiple sources to ensure timely delivery when demand exceeds global supply. They often cancel orders when business is weak and inventories are excessive. Therefore, we cannot be certain that the amount of our backlog accurately reflects the level of orders that we will ultimately deliver. Our results of operations could be adversely impacted if customers cancel a material portion of orders in our backlog. Our future success is substantially dependent on our ability to attract and retain highly qualified technical, managerial, marketing, finance, and administrative personnel. Rapid changes in technologies, frequent new product introductions, and declining average selling prices over product life cycles require us to attract and retain highly qualified personnel to develop and manufacture products that feature technological innovations and bring them to market on a timely basis. Our complex operations also require us to attract and retain highly qualified administrative personnel in functions such as legal, tax, accounting, financial reporting, auditing, and treasury. The market for personnel with such qualifications is highly competitive. While we have employment agreements with certain of our executives, we have not entered into employment agreements with all of our key personnel. The loss of the services of or the failure to effectively recruit qualified personnel could have a material adverse effect on our business. Significant fluctuations in interest rates could adversely affect our results of operations and financial position. We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. Our credit facility bears interest at variable rates based on Secured Overnight Financing Rate ("SOFR") and other currency-specific reference rates. A significant increase in such reference rates would significantly increase our interest expense. A general increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investment balances, which are currently greater than our debt balances. However, there can be no assurance that the interest rate earned on cash and short-term investments will move in tandem with the interest rate paid on our variable rate debt. 17 Cyberattacks and other interruptions in our information technology systems could adversely affect our business. We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business. We are exposed to, and may be adversely affected by, potential cyberattacks or other disruptions to our information technology systems and data security. Any significant system or network disruption, including, but not limited to, new system implementations, computer viruses, security breaches, phishing, spoofing, cyberattacks, facility issues or energy blackouts could have a material adverse impact on our operations and results of operations. These incidents, which might be related to industrial or other espionage, include covertly introducing malware and spyware to our computers and networks (or to an electronic system operated by a third party for our benefit) and impersonating authorized users, among others. Such a network disruption could result in a loss of the confidentiality of our intellectual property or the release of sensitive competitive information or customer, supplier or employee personal data. Any loss of such information could harm our competitive position, result in a loss of customer confidence, and cause us to incur significant costs to remedy the damages caused by the disruptions or security breaches. We have implemented protective measures to prevent against and limit the effects of system or network disruptions, but there can be no assurance that such measures will be sufficient to prevent or limit the damage from any disruptions and any such disruption could have a material adverse impact on our business and results of operations. We are subject to numerous laws and regulations regarding privacy and data protection. The scope of these laws and regulations is evolving rapidly and is subject to differing interpretations, and thus may be inconsistent among jurisdictions. Such laws and regulations have resulted and will continue to result in significantly greater compliance burdens and costs for us. Third-party service providers, such as foundries, subcontractors, distributors, and vendors have access to certain portions of our sensitive data. In the event that these service providers do not properly safeguard our data that they hold, security breaches and loss of our data could result. Any such loss of data by our third- party service providers could have a material adverse impact on our business and results of operations. Future acquisitions could require us to issue additional indebtedness or equity. If we were to undertake a substantial acquisition for cash, the acquisition would likely need to be financed in part through bank borrowings or the issuance of public or private debt. This acquisition financing would likely decrease our ratio of earnings to fixed charges and adversely affect other leverage criteria. Under our credit facility, we are required to obtain the lenders’ consent for certain additional debt financing and to comply with other covenants including the application of specific financial ratios. We cannot make any assurances that the necessary acquisition financing would be available to us on acceptable terms if and when required. If we were to undertake an acquisition for equity, the acquisition may have a dilutive effect on the interests of the holders of our common stock. Regulatory and compliance related risks Future changes in our environmental liability and compliance obligations may harm our ability to operate or increase our costs. Our operations, products and/or product packaging are subject to, among other matters, environmental laws and regulations governing, among other matters, air emissions, wastewater discharges, the handling, disposal and remediation of hazardous substances, wastes and certain chemicals used or generated in our manufacturing processes, employee health and safety labeling or other notifications with respect to the content or other aspects of our processes, products or packaging, restrictions on the use of certain materials in or on design aspects of our products or product packaging, and responsibility for disposal of products or product packaging. We establish reserves for specifically identified potential environmental liabilities. Nevertheless, we have in the past and may in the future inherit certain pre-existing environmental liabilities, generally based on successor liability doctrines, or otherwise incur environmental liabilities. We are involved in remediation programs and related litigation at various current and former properties and at third-party disposal sites both within and outside of the United States, including involvement as a potentially responsible party at Superfund sites. Although we have never been involved in any environmental matter that has had a material adverse impact on our overall operations, there can be no assurance that in connection with any past or future acquisition, future developments, including related to our remediation programs, or otherwise, we will not be obligated to address environmental matters that could have a material adverse impact on our results of operations. In addition, more stringent environmental laws and regulations may be enacted in the future, and we cannot presently determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with current and future laws and regulations. In order to resolve liabilities at various sites, we have entered into various administrative orders and consent decrees, some of which may be, under certain conditions, reopened or subject to renegotiation. Our products are sold to or used in goods sold to the U.S. government and other governments. By virtue of such sales, we are subject to various regulatory requirements and risks in the event of non-compliance. We sell products under prime and subprime contracts with the U.S. government and other governments. Many of these products are used in military applications. Government contractors must comply with specific procurement regulations and other requirements. These requirements, although customary in government contracts, impact our performance and compliance costs. Failure to comply with these regulations and requirements could result in contract modifications or termination, and the assessment of penalties and fines, which could negatively impact our results of operations and financial condition. Our failure to comply with these regulations and requirements could also lead to suspension or debarment, for cause, from government contracting or subcontracting for a period of time. Among the causes for debarment are violations of various statutes, including those related to procurement integrity, export control, government security regulations, employment practices, protection of the environment, accuracy of records and the recording of costs, and foreign corruption. The termination of a government contract as a result of any of these acts could have a negative impact on our results of operations and financial condition and could have a negative impact on our reputation and ability to procure other government contracts in the future. 18 We have qualified certain of our products under various military specifications approved and monitored by the United States Defense Electronic Supply Center and under certain European military specifications. These products are assigned certain classification levels. In order to maintain the classification level of a product, we must continuously perform tests on the products and the results of these tests must be reported to governmental agencies. If a product fails to meet the requirements of the applicable classification level, its classification may be reduced to a lower level. A decrease in the classification level for a product with a military application could have an adverse impact on the net revenues and earnings attributable to that product. Our credit facility restricts our current and future operations and requires compliance with certain financial covenants. Our credit facility includes restrictions on, among other things, incurring indebtedness, incurring liens on assets, making investments and acquisitions, making asset sales, and paying cash dividends and making other restricted payments. Our credit facility also requires us to comply with other covenants, including the maintenance of specific financial ratios. If we are not in compliance with all of such covenants, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible debt instruments have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated. Risks associated with our operations outside the United States We are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate. We have substantial operations outside the United States, and approximately 74% of our revenues during 2023 were derived from sales to customers outside the United States. Certain of our assets are located, and certain of our products are produced, in countries which are subject to risks of social, political, economic, and military instability. This instability could result in wars, riots, nationalization of industry, currency fluctuation, and labor unrest. These conditions could have an adverse impact on our ability to operate in these regions and, depending on the extent and severity of these conditions, could materially and adversely affect our overall financial condition, results of operations, and our ability to access our liquidity. Our business has been in operation in Israel for 53 years, where we have substantial manufacturing operations. Although we have never experienced any material interruption in our operations attributable to these factors, in spite of several Middle East crises, including the current war with Hamas, our financial condition and results of operations might be adversely affected if events were to occur in the Middle East that interfered with our operations in Israel. Our global operations are subject to extensive anti-corruption laws and other regulations. The U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence foreign government officials for the purpose of obtaining or retaining business, or obtaining an unfair advantage. Recent years have seen a substantial increase in the global enforcement of anti-corruption laws. Our continued operation and expansion outside the United States, including in developing countries, could increase the risk of such violations or violations under other regulations relating to limitations on or licenses required for sales made to customers located in certain countries. Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business, and result in a material adverse effect on our reputation, business and results of operations or financial condition. We attempt to improve profitability by controlling labor costs, but these activities could result in labor unrest or considerable expense. Historically, our primary labor cost controlling strategy was to transfer manufacturing operations to countries with lower production costs, such as the Dominican Republic, India, Malaysia, Mexico, the People’s Republic of China, and the Philippines. We believe that our manufacturing footprint is suitable to serve our customers and end markets, while maintaining lower manufacturing costs. We do not anticipate further transferring any significant existing operations to lower- labor-cost countries; however, acquired operations may be transferred to lower-labor-cost countries when integrated into Vishay. Currently, our primary labor cost controlling strategy involves reducing hours and limiting the use of subcontractors and foundries when demand for our products decreases. Shifting operations to lower-labor-cost countries, reducing hours, or limiting the use of subcontractors and foundries could result in production inefficiencies, higher costs, and/or strikes or other types of labor unrest. 19 We are subject to foreign currency exchange rate risks which may impact our results of operations. We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. From time to time, we utilize forward contracts to hedge a portion of projected cash flows from these exposures. Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locations in Asia in local currencies. Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local currencies. Our exposure to foreign currency risk is mitigated to the extent that the costs incurred and the revenues earned in a particular currency offset one another. Our exposure to foreign currency risk is more pronounced in situations where, for example, production labor costs are predominantly paid in local currencies while the sales revenue for those products is denominated in U.S. dollars. This is particularly the case for products produced in Israel, the Czech Republic, and China. A change in the mix of the currencies in which we transact our business could have a material effect on results of operations. Furthermore, the timing of cash receipts and disbursements could have a material effect on our results of operations, particularly if there are significant changes in exchange rates in a short period of time. Most of our operating cash is generated by our non-U.S. subsidiaries, and our U.S. parent company and U.S. subsidiaries have significant payment obligations. We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2023, 65.5% of our cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Our revolving credit facility provides us with additional U.S. liquidity. U.S. tax obligations, cash dividends to stockholders, share repurchases, additional convertible debt repurchases, and principal and interest payments on our debt instruments need to be paid by our U.S. parent company, Vishay Intertechnology, Inc. A U.S.-domiciled subsidiary is expected to be the acquiring entity of Nexperia's wafer fabrication facility and operations in Newport, South Wales, U.K. Our U.S. subsidiaries have other operating cash needs. If our U.S. cash and cash equivalents and short-term investment and other liquidity sources are inadequate to satisfy these obligations, we may be required to repatriate additional cash to the United States and would be required to accrue and pay additional taxes. If we are unable to repatriate adequate cash to the United States to satisfy these obligations, it could materially and adversely affect our overall financial condition, results of operations and our liquidity. Changes in U.S. trade policies, and related factors beyond our control, may adversely impact our business, financial condition, and results of operations. Our business is subject to risks associated with U.S. and foreign legislation and regulations relating to imports, including quotas, duties, tariffs or taxes, and other import charges or restrictions, which could adversely affect our operations and our ability to import products. The U.S. has taken actions that impact U.S. trade with China, including restricting the export of certain goods and equipment to China, imposing tariffs on certain goods manufactured in China and imported into the U.S., including certain of our products. Such actions may impact our competitiveness and adversely affect the demand for these products, or if those costs cannot be passed on to our customers, could adversely impact our results of operations for affected segments and the Company as a whole. Further changes in U.S. trade policy could trigger additional retaliatory actions by affected countries. If these consequences are realized, it could result in a general economic downturn or otherwise have a material adverse effect on our business. Risks related to our capital structure The holders of our Class B common stock have effective voting control of our company, giving them the effective ability to prevent a change in control transaction. We have two classes of common stock: common stock and Class B common stock. The holders of common stock are entitled to one vote for each share held, while the holders of Class B common stock are entitled to 10 votes for each share held. At December 31, 2023, the holders of Class B common stock held approximately 49.1% of the voting power of the Company. The ownership of Class B common stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approve other actions as stockholders. Mrs. Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7% of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023. Holders of our Class B common stock may act in ways that are contrary to, or not in the best interests of, holders of our common stock. The voting rights of the holders of our Class B common stock effectively give such holders the ability to prevent transactions that would result in a change in control of us, including transactions in which holders of our common stock might otherwise receive a premium for their shares over the then-current market price. Our acquisition strategy could be impeded if our Board of Directors were reluctant to authorize the issuance of substantial additional shares. Our overall long-term business strategy has historically included a strong focus on acquisitions financed alternatively through cash on hand or the incurrence of indebtedness. We may in the future be presented with attractive investment or strategic opportunities that, because of their size and our financial condition at the time, would require the issuance of substantial additional amounts of our common stock. If such opportunities were to arise, our Board of Directors may consider the potentially dilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders, and may therefore be reluctant to authorize the issuance of additional shares. Any such reluctance could impede our ability to complete certain transactions. 20 Our outstanding convertible debt instruments may impact the trading price of our common stock. We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertible arbitrage strategy with respect to these instruments. Investors that employ a convertible arbitrage strategy with respect to convertible debt instruments typically implement that strategy by selling short the common stock underlying the convertible instrument and dynamically adjusting their short position while they hold the instrument. The implementation of this strategy by investors in our convertible debt instruments, as well as related market regulatory actions, could have a significant impact on the trading prices of our common stock, and the trading prices and liquidity of our convertible debt instruments. The price of our common stock and our convertible debt instruments could also be affected by possible sales of our common stock by investors who view our convertible debt instruments as more attractive means of equity participation in us. Conversion of our outstanding 2025 Notes and 2030 Notes may dilute the ownership interest of our existing stockholders, including holders who had previously converted their notes. The conversion of some or all of our outstanding 2.25% convertible senior notes due 2025 (the "2025 Notes") or our outstanding 2.25% convertible senior notes due 2030 (the "2030 Notes") may dilute the ownership interests of our existing stockholders. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. We may not have the ability to raise the funds necessary to settle conversions of our outstanding 2025 Notes and 2030 Notes in cash or to repurchase the notes upon a fundamental change or on a repurchase date, as applicable, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2025 Notes or 2030 Notes. Holders of our outstanding 2025 Notes and 2030 Notes have the right to require us to repurchase all or a portion of their 2025 Notes or 2030 Notes, as the case may be, upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2025 Notes or 2030 Notes, as the case may be, to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the 2030 Notes, we will be required to make cash payments for each $1,000 in principal amount of 2030 Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values as described in the indenture governing the 2030 Notes. Our outstanding 2025 Notes contain similar provisions concerning the holders’ rights to require us to repurchase their 2025 Notes upon a fundamental change and to pay cash to settle conversions of their 2025 Notes. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2030 Notes or the 2025 Notes surrendered therefor or notes being converted. In addition, our ability to repurchase the 2025 Notes or the 2030 Notes or to pay cash upon conversions of the 2025 Notes or 2030 Notes may be limited by law, by regulatory authority or by agreements governing our existing and future indebtedness, as described below. For example, our credit facility in effect from time to time may prohibit us from making any cash payments on the conversion or repurchase of the 2025 Notes or the 2030 Notes, as the case may be, upon a fundamental change repurchase if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with the applicable financial covenants under that facility. Any new credit facility into which we may enter may have similar restrictions unless certain conditions are met. Our failure to make cash payments upon the conversion or repurchase of the 2025 Notes or the 2030 Notes, as the case may be, as required under the terms of the applicable indenture governing such notes would permit holders of the 2025 Notes or the 2030 Notes, as the case may be, to accelerate our obligations under the 2025 Notes or the 2030 Notes, as the case may be. Our failure to repurchase the 2025 Notes or 2030 Notes at a time when the repurchase is required by the applicable indenture or to pay any cash payable on future conversions of the 2025 Notes or the 2030 Notes as required by the applicable indenture would constitute a default under such indenture. A default under such indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness, including our credit facility. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash payments upon conversions thereof. The conditional conversion feature of our outstanding 2025 Notes and 2030 Notes, if triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the 2025 Notes or 2030 Notes is triggered, holders of such notes will be entitled to convert the notes at any time during specified periods at their option. If one or more holders elect to convert their notes, we would be required to settle any converted principal through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. Certain provisions in the indentures governing the 2025 Notes and 2030 Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us. Certain provisions in the 2025 Notes and 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us. For example, if a takeover would constitute a fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash. In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection with such takeover. In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the notes or holders of our common stock may view as favorable. 21 The capped call transactions may affect the market price of our common stock. In connection with the pricing of, and the initial purchasers’ exercise in full of their option to purchase additional, 2030 Notes, we entered into capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce potential dilution to our common stock upon conversion of any 2030 Notes and to offset any cash payments made in excess of the principal amount of converted 2030 Notes, as the case may be, with such reduction and/or offset subject to a cap. In connection with establishing their initial hedges of the capped call transactions, we expect the option counterparties or their respective affiliates to have purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the 2030 Notes. In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of the 2030 Notes and prior to the maturity of the 2030 Notes (and are likely to do so on each exercise date for the capped call transactions or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the 2030 Notes). This activity could cause or avoid an increase or decrease in the market price of our common stock. In addition, if any such capped call transactions fail to become effective, the option counterparties or their respective affiliates may unwind their hedge positions with respect to our common stock, which could adversely affect the value of our common stock. We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of our common stock. In addition, we do not make any representation that the option counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. We are subject to counterparty risk with respect to the capped call transactions. The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock. We can provide no assurance as to the financial stability or viability of the option counterparties. Anti-takeover defenses in our amended and restated certificate of incorporation, our amended and restated bylaws and under Delaware law may impede or discourage a merger, a takeover attempt or other business combinations, which could also reduce the market price of our common stock. We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing stockholders. Our amended and restated certificate of incorporation and amended and restated bylaws also contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our Board of Directors or take other corporate actions, including effecting changes in our management. These provisions include: • • • • • • the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions; the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause, each of which could delay the ability of stockholders to change the membership of a majority of our board of directors; the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt. 22 In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. This statute prohibits a Delaware corporation listed on a national securities exchange from engaging in a business combination with an interested stockholder (generally a person who, together with its affiliates, owns or within the last three years has owned 15% or more of our voting stock subject to certain exceptions) for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The application of Section 203 also could have the effect of delaying or preventing a change in control of us. Any of these provisions could, under certain circumstances, depress the market price of our common stock. The ability of our board of directors or a committee thereof to create and issue a new series of preferred stock and certain provisions of Delaware law and our certificate of incorporation and bylaws could impede a merger, takeover attempt or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock. Risks related to the spin-off of the Vishay Precision Group Vishay Precision Group is using the Vishay name under license from us, which could result in product and market confusion or the loss of certain of our rights to the Vishay name. VPG has a worldwide, perpetual and royalty-free license from us to use the “Vishay” mark as part of its corporate name and in connection with the manufacture, sale, and marketing of the products and services that comprise its measurements and foil resistors businesses. The license of the Vishay name to VPG is important to VPG because the success of VPG depends on the reputation of the Vishay brand for these products and services built over many years. Nonetheless, there exists the risk that the use by VPG could cause confusion in the marketplace over the products of the two companies, that any negative publicity associated with a product or service of VPG following the spin-off could be mistakenly attributed to our company or that we could lose our own rights to the “Vishay” mark if we fail to impose sufficient controls on VPG’s use of the mark. General Risk Factors In addition to the risks relating specifically to our business, a variety of other factors relating to general conditions could cause actual results, performance, or achievements to differ materially from those expressed in any of our forward-looking statements. These factors include: • • • • • • • overall economic and business conditions; competitive factors in the industries in which we conduct our business; changes in governmental regulation; changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations; changes in GAAP or interpretations of GAAP by governmental agencies and self-regulatory groups; interest rate fluctuations, foreign currency rate fluctuations, and other capital market conditions; and economic and political conditions in international markets, including governmental changes and restrictions on the ability to transfer capital across borders. Our common stock, traded on the New York Stock Exchange, has in the past experienced, and may continue to experience, significant fluctuations in price and volume. We believe that the financial performance and activities of other publicly traded companies in the electronic component industry could cause the price of our common stock to fluctuate substantially without regard to our operating performance. We operate in a continually changing business environment, and new factors emerge from time to time. Other unknown and unpredictable factors also could have a material adverse effect on our future financial condition and results of operations. 23 Item 1B. None. Item 1C. UNRESOLVED STAFF COMMENTS CYBERSECURITY We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws. We are committed to maintaining robust governance and oversight of these risks and to implementing mechanisms, controls, technologies, and processes designed to help us assess, identify, and manage these risks. While we have not, as of the date of this Form 10-K, experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future. Such incidents, whether or not successful, could result in us incurring significant costs related to, for example, rebuilding our internal systems, writing down inventory value, implementing additional threat protection measures, defending against litigation, responding to regulatory inquiries or actions, paying damages, providing customers with incentives to maintain a business relationship with us, or taking other remedial steps with respect to third parties, as well as incurring significant reputational harm. In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures. Based on media reports and other surveys, we believe there is a general increase in cyberattack volume, frequency, and sophistication. We have experienced the same in our own business. We seek to detect and investigate unauthorized attempts and attacks against our network and to prevent their occurrence and recurrence where practicable through changes or updates to our internal processes and tools; however, we remain potentially vulnerable to known or unknown threats. In some instances, we, our suppliers, and our customers can be unaware of a threat or incident or its magnitude and effects. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. See "Risk Factors" for more information on our cybersecurity risks. We aim to incorporate industry best practices throughout our cybersecurity program. Identifying and assessing cybersecurity risk is integrated into our overall risk management program. Our cybersecurity strategy focuses on implementing effective and efficient controls, technologies, and other processes to assess, identify, and manage material cybersecurity risks. Our cybersecurity program is designed to be aligned with applicable industry standards and is tested annually by independent third-party consultants. We have processes in place to assess, identify, manage, and address material cybersecurity threats and incidents. These include, among other things: annual and ongoing security awareness training for employees; mechanisms to detect and monitor unusual network activity; and containment and incident response tools. We monitor issues that are internally discovered or externally reported that may affect us, and have processes to assess those issues for potential cybersecurity impact or risk. Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. Members of the Audit Committee receive updates on at least an annual basis from senior management, including leaders from our Information Technology, Internal Audit, and Legal teams regarding matters of cybersecurity. This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. Our Board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs. Our cybersecurity risk management and strategy processes are overseen by leaders from our Information Technology, Internal Audit, and Legal teams. Such individuals have an average of over 20 years of prior work experience in various roles involving information technology, security, auditing, legal, compliance, systems and programming. These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to the Audit Committee on any appropriate items. 24 Item 2. PROPERTIES At December 31, 2023, our business had 57 manufacturing locations. Our manufacturing facilities include owned and leased locations. Some locations include both owned and leased facilities in the same location. The list of manufacturing facilities below excludes former manufacturing facilities that are not presently used for manufacturing activities. In the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our present needs. Owning many of our manufacturing facilities provides us meaningful financial and operating benefits, including long-term stability and a necessary buffer for economic downturns. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. The principal locations of our owned manufacturing facilities, along with available space including administrative offices, are as follows: Owned Locations Business Segment Approx. Available Space (Square Feet) United States Columbus, NE Bennington, VT Yankton, SD Warwick, RI Niagara Falls, NY Marshall, MN Non-U.S. Vocklabruck, Austria People's Republic of China Tianjin Shanghai Xi'an Czech Republic Blatna Dolni Rychnov Prachatice Volary France Nice Chateau Gontier Hyeres Germany Selb Heide Landshut Fichtelberg Budapest, Hungary Loni, India Israel Dimona Migdal Ha'Emek Be'er Sheva Turin, Italy Miharu, Japan Melaka, Malaysia Juarez, Mexico Famalicao, Portugal Republic of China (Taiwan) Taipei Kaohsiung Resistors Capacitors Inductors Resistors Resistors Inductors Diodes Diodes Diodes MOSFETs and Diodes Resistors and Capacitors Resistors and Capacitors Capacitors Resistors Resistors Resistors Resistors Resistors and Capacitors Resistors Capacitors Resistors Diodes Resistors and Capacitors Resistors and Capacitors Capacitors Resistors, Inductors and Capacitors Diodes Capacitors Optoelectronic Components Resistors Capacitors Diodes MOSFETs 201,000 64,000 60,000 56,000 34,000 22,000 100,000 397,000 195,000 133,000 276,000 183,000 92,000 35,000 221,000 82,000 59,000 472,000 264,000 75,000 36,000 101,000 405,000 404,000 288,000 276,000 102,000 165,000 156,000 75,000 222,000 366,000 105,000 25 The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are as follows: Leased Locations Business Segment United States Approx. Available Space (Square Feet) Columbus, NE Attleboro, MA Ontario, CA Dover, NH East Windsor, CT Hollis, NH Fremont, CA Glendale, WI Hudson, MA Montevideo, MN Duluth, MN Non-U.S. Klagenfurt, Austria People’s Republic of China Danshui Shanghai Shatian Zhuhai Long Xi Santo Domingo, Dominican Republic Germany Itzehoe Heilbronn Selb Mumbai, India Mexico Juarez Durango Mexicali Manila, Philippines Kaohsiung, Republic of China (Taiwan) Resistors Resistors Resistors Inductors Resistors Resistors Resistors Resistors Resistors Inductors Inductors Capacitors Capacitors, Inductors, and Resistors MOSFETs Capacitors and Resistors Inductors Resistors Inductors MOSFETs Diodes and Optoelectronic Components Capacitors Diodes Resistors Inductors Resistors Optoelectronic Components Diodes 87,000 40,000 38,000 35,000 30,000 25,000 18,000 14,000 13,000 11,000 10,000 150,000 446,000 300,000 218,000 179,000 36,000 44,000 217,000 163,000 47,000 34,000 314,000 200,000 15,000 149,000 130,000 26 Item 3. LEGAL PROCEEDINGS From time to time we are involved in routine litigation incidental to our business. Management believes that such matters, either individually or in the aggregate, should not have a material adverse effect on our business or financial condition. Intellectual Property Matters We are engaged in discussions with various parties regarding patent licensing and cross patent licensing issues. In addition, we have observed that in the current business environment, electronic component and semiconductor companies have become more aggressive in asserting and defending patent claims against competitors. When we believe other companies are misappropriating our intellectual property rights, we vigorously enforce those rights through legal action, and we intend to continue to do so. Environmental Matters Vishay is involved in environmental remediation programs at various sites currently or formerly owned by Vishay and its subsidiaries both within and outside of the U.S., in addition to involvement as a potentially responsible party (“PRP”) at Superfund sites. Certain obligations as a PRP have arisen in connection with business acquisitions. The remediation programs are on-going and the ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. See also Note 13 to our consolidated financial statements. Vishay GSI, Inc. (“VGSI”), a wholly owned subsidiary of the Company, is a direct defendant in two separate, but related, litigation matters: (1) 101 Frost Street Associates, L.P. v. United States Department of Energy et al.; and (2) Hicksville Water District v. United States Department of Energy, et al. VGSI was also a third-party defendant in a third related matter, United States v Island Transportation Corp. et al. On September 12, 2022, the United States District Court for the Eastern District of New York dismissed all third-party complaints commenced by Island Transportation Corp. against nineteen third-party defendants including VGSI. The two remaining cases are pending in the United States District Court for the Eastern District of New York. The two remaining cases contain claims for recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), and allege that a predecessor’s manufacturing operations in Hicksville, New York (the “Site”), between 1960 and 1993, impacted groundwater beneath and downgradient of the Site. The groundwater beneath and downgradient of the Site is part of the New Cassel/Hicksville Groundwater Contamination Site, which was added to the National Priorities List pursuant to CERCLA on September 15, 2011. The Company is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims. VGSI was served in August 2023 with a complaint brought by the Hicksville Water District against multiple defendants. The matter, Hicksville Water District v. Alsy Manufacturing, Inc., is pending in the Supreme Court of the State of New York, County of Nassau. As with two other previously reported cases pending in the United States District Court for the Eastern District of New York, the newest case contains claims for recovery of response costs under CERCLA, and alleges that a predecessor’s manufacturing operations in the Site, between 1960 and 1993, impacted groundwater beneath and downgradient of the Site. VGSI is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims. On August 31, 2023, Vishay was notified by the U.S. Environmental Protection Agency ("EPA") of potential violations of the Resource Conservation and Recovery Act and the Solid Waste Disposal Act. The alleged violations relate to the handling, storage, inspection, and labeling of hazardous waste at Vishay's facility located in Columbus, Nebraska. Vishay has reached an agreement with the EPA, subject to execution of and finalization of the Consent Agreement, including the filing and ratification of the Consent Agreement, including the filing and ratification of the Consent Agreement by the Regional Hearing Clerk for EPA, Region 7, to settle this matter for a civil penalty of $387,000 and committing to submit quarterly compliance reports to the EPA for one year. Vishay admits no violation of any law or regulation under the agreement. The Company does not expect the matter or its settlement as proposed to have a material effect on its financial condition or results of operations. Item 4. MINE SAFETY DISCLOSURES None. 27 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information regarding our executive officers as of February 16, 2024: Name Marc Zandman* Joel Smejkal* Lori Lipcaman Jeff Webster Roy Shoshani Peter Henrici Michael O'Sullivan * Member of the Executive Committee of the Board of Directors. Age 62 57 66 53 50 68 49 Positions Held Executive Chairman of the Board, Chief Business Development Officer, and President, Vishay Israel Ltd. Chief Executive Officer, President, and Director Executive Vice President and Chief Financial Officer Executive Vice President - Chief Operating Officer Executive Vice President - Chief Technical Officer Executive Vice President - Corporate Development Executive Vice President - Chief Administrative and Legal Officer Marc Zandman was appointed Executive Chairman of the Board and Chief Business Development Officer effective June 5, 2011. Mr. Zandman has served as a Director of Vishay since 2001 and President of Vishay Israel Ltd. since 1998. Mr. Zandman previously was Vice Chairman of the Board from 2003 to June 2011, and Chief Administration Officer from 2007 to June 2011. Mr. Zandman was Group Vice President of Vishay Measurements Group from 2002 to 2004. Mr. Zandman has served in various other capacities with Vishay since 1984. He is the son of the late Dr. Felix Zandman, Vishay’s Founder. Mr. Zandman controls, on a shared basis with Ruta Zandman and Ziv Shoshani, approximately 35.0% of the total voting power of our capital stock as of December 31, 2023. He also serves on the Board of Directors of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from Vishay Intertechnology in 2010 (including as non-executive Chair from 2010 - 2022). Joel Smejkal was appointed President and Chief Executive Officer effective January 1, 2023. Mr. Smejkal served as Executive Vice President, Corporate Business Development from 2020-2022. He has held various positions of increasing responsibility since joining Vishay in 1990, including Executive Vice President, Business Head Passive Components (2017-2020) and Senior Vice President Global Distribution Sales (2012-2016). His experience with Vishay includes worldwide and divisional leadership roles in engineering, marketing, operations, and sales. Lori Lipcaman was appointed Executive Vice President and Chief Financial Officer of the Company effective September 1, 2011. Ms. Lipcaman had been appointed Executive Vice President Finance and Chief Accounting Officer in September 2008. Previously, she served as Vishay’s Corporate Senior Vice President, Operations Controller, from March 1998 to September 2008. Prior to that, she served in various positions of increasing responsibility in finance and controlling since joining the Company in May 1989. Jeff Webster was appointed Executive Vice President - Chief Operating Officer effective January 1, 2023. Mr. Webster served as Executive Vice President, Business Head Passive Components from 2020-2022. He has held various positions of increasing responsibility since joining Vishay in 2000, including Senior Vice President Global Quality (2014-2019) and Vice President Global Quality – Actives (2000-2014). Roy Shoshani was appointed Executive Vice President – Chief Technical Officer effective January 1, 2023. Mr. Shoshani has held various positions of increasing responsibility since joining Vishay in 2004, including Deputy to the Chief Technical Officer (2021-2022), Vice President Integrated Circuits Division (2009-2022), and Vice President R&D – Semiconductors (2019-2021). Prior to joining Vishay, Mr. Shoshani worked for Harmonic. Mr. Shoshani’s experience with Vishay includes divisional leadership roles in R&D, marketing, business development and operations. Peter Henrici was appointed Executive Vice President – Corporate Development effective January 1, 2023 and has served as Corporate Secretary since 2012. Mr. Henrici has held various positions in marketing communications, investor relations, and corporate treasury departments since joining Vishay in 1998. Mr. Henrici has been responsible for corporate communications since 2005. Michael O'Sullivan was appointed Executive Vice President - Chief Administrative and Legal Officer effective January 1, 2024. Mr. O’Sullivan previously served as Corporate General Counsel since joining the Company in 2012. In July 2016, Mr. O'Sullivan was appointed Regional Country Manager - The Americas. Prior to joining Vishay, Mr. O'Sullivan worked as an in-house corporate attorney for a subsidiary of Koch Industries, Inc., and in private practice at DLA Piper. 28 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange under the symbol VSH. The following table sets forth the high and low sales prices for our common stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters. Holders of record of our common stock totaled approximately 1,000 at February 14, 2024. Because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners represented by these stockholders of record. In 2014, the Company's Board of Directors instituted a quarterly cash dividend program and declared the first cash dividend in the history of Vishay. Quarterly cash dividends have been paid in each quarter since the first fiscal quarter of 2014. We expect to continue to pay quarterly dividends, although the amount and timing of any future dividends remains subject to authorization of our Board of Directors. The following table sets forth, for the indicated periods, the high and low sales prices of our common stock and the quarterly cash dividends declared. Fourth quarter Third quarter Second quarter First quarter Common stock price range 2023 2022 Dividends declared per share High Low High Low 2023 2022 $ $ $ $ 25.22 30.10 29.66 24.48 $ $ $ $ 21.15 24.03 20.57 20.51 $ $ $ $ 23.39 21.58 20.91 22.71 $ $ $ $ 17.63 16.73 17.13 17.58 $ $ $ $ 0.10 0.10 0.10 0.10 $ $ $ $ 0.10 0.10 0.10 0.10 At February 14, 2024, we had outstanding 12,097,148 shares of Class B common stock, par value $.10 per share, each of which entitles the holder to ten votes. The Class B common stock generally is not transferable except in certain very limited instances, and there is no market for those shares. The Class B common stock is convertible, at the option of the holder, into common stock on a share for share basis. As a result of the passing of our founder and former Executive Chairman, Dr. Felix Zandman, Mrs. Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors) approximately 89.7% of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023. Certain of our debt obligations contain restrictions as to the payment of cash dividends. See "Financial Condition, Liquidity, and Capital Resources" included in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." In 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. The Stockholder Return Policy calls for us to return a prescribed amount of cash flows on an annual basis. We intend to return such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases. We paid $55.6 million of dividends to stockholders and repurchased $78.7 million of our stock pursuant to the Stockholder Return Policy in 2023. To enable the operation of the Stockholder Return Policy, Vishay's Board of Directors approves the repurchase of a stated number of shares of common stock from time-to-time. As of September 30, 2023, approximately 1.3 million shares remained from the previous repurchase authorization of 6.0 million shares. On November 28, 2023, Vishay's Board of Directors approved the repurchase of an additional 2.5 million shares of common stock, to enable the operation of the Stockholder Return Policy for the foreseeable future. The following table provides information regarding repurchases of our common stock during the fiscal quarter ended December 31, 2023: Period October 1 - October 28 October 29 - November 25 November 26 - December 31 Total Total Number of Shares Purchased Average Price Paid per Share (including commission) Total Number of Shares Purchased as Part of Publicly Announced Program Total Dollar Amount Purchased Under the Program Maximum Number of Shares that May Yet Be Purchased Under the Program 254,985 309,914 336,540 901,439 $ $ 23.92 22.63 23.50 23.32 254,985 $ 6,099,333 309,914 7,013,513 7,910,080 336,540 901,439 $ 21,022,926 1,023,839 713,925 2,877,385 2,877,385 29 Stock Performance Graph The line graph below compares the cumulative total stockholder return on Vishay’s common stock over a 5-year period with the returns on the Standard & Poor’s MidCap 400 Stock Index (of which Vishay is a component), the Standard & Poor’s 500 Stock Index, and the Philadelphia Semiconductor Index. The line graph assumes that $100 had been invested at December 31, 2018 and assumes that all dividends were reinvested. Company Name / Index Vishay Intertechnology, Inc. S&P 500 Index S&P MidCap 400 Index Philadelphia Semiconductor Index Base Period 2018 100 100 100 100 Years Ending December 31, 2019 2020 2021 2022 120.66 131.49 126.20 163.26 120.03 155.68 143.44 250.87 128.98 200.37 178.95 358.37 129.84 164.08 155.58 233.37 2023 146.67 207.21 181.15 389.74 Comparison of Cumulative Five Year Total Return $500 $400 $300 $200 $100 $0 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Vishay Intertechnology, Inc. S&P 500 Index S&P MidCap 400 Index Philadelphia Semiconductor Index Item 6. RESERVED Not applicable. 30 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management's Discussion and Analysis (“MD&A”) is intended to provide an understanding of Vishay's financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. The MD&A should be read in conjunction with our Consolidated Financial Statements and accompanying Notes filed herewith, commencing on page F-1 of this report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed elsewhere in this Annual Report on Form 10-K, particularly in Item 1A. “Risk Factors.” Overview Vishay Intertechnology, Inc. ("Vishay," "we," "us," or "our") manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that are essential to innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets. We operate in six segments based on product functionality: MOSFETs, Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors. We are focused on enhancing stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by opportunistic acquisitions, while maintaining a prudent capital structure. To drive growth and optimize stockholder value, we plan to capitalize on the mega trends of e-mobility, sustainability, and connectivity through initiatives. We are developing go-to-market strategies and investing in and expanding the key product lines for growth that we have identified. We have increased our capacity internally by investing approximately $329 million in 2023 and plan to invest approximately $1.2 billion in total from 2023 - 2025 primarily for capital expansion projects outside of China. In addition, we are strategically expanding our outsourced production of commodity products to subcontractors. At the same time, we are enhancing our channel management while investing in internal resources by adding customer- facing engineers and filling gaps in technology and market coverage. Taken together, each of these initiatives supports our Think Customer First organizational culture. On November 8, 2023, we and Nexperia BV announced that we have entered into an agreement whereby we will acquire Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $177 million in cash, subject to customary post-closing adjustments. The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024. In addition to enhancing stockholder value through growing our business, in 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. See further discussion in “Stockholder Return Policy” below. On September 12, 2023, we issued $750 million convertible senior notes due 2030. We used the net proceeds from the issuance of these notes to repurchase $370.2 million principal amount of convertible senior notes due 2025, $94.2 million to enter into capped call transactions intended to mitigate the dilution risk of convertible senior notes due 2030 by synthetically increasing the conversion price of the notes to approximately $43.98 per share, to repay amounts outstanding on our amended and restated credit facility, and for other general corporate purposes. We recognized a loss of $18.9 million due to the early extinguishment of the repurchased convertible senior notes due 2025. On May 8, 2023, we amended and restated our $750 million revolving credit agreement, which replaced our credit agreement that was scheduled to mature in June 2024. The amendment and restatement extended the maturity date of the revolving credit agreement until May 8, 2028, replaced the previous total leverage ratio used for financial covenant compliance measurement with a net leverage ratio, and replaced the LIBOR-based interest rate and related LIBOR-based mechanics applicable to U.S. dollar borrowings under the revolving credit agreement with an interest rate based on the Secured Overnight Financing Rate ("SOFR") (including a customary spread adjustment) and related SOFR-based mechanics. The maturity date of the credit facility will accelerate if within ninety- one days prior to the maturity of our convertible senior notes due 2025, the outstanding principal amount of such notes exceeds a defined liquidity measure as set forth in the credit facility. The repurchase of $370.2 million principal amount of convertible senior notes due 2025 in September 2023 substantially reduces the risk of maturity date acceleration. Other terms and conditions are substantially unchanged. Our business and operating results have been and will continue to be impacted by worldwide economic conditions. Our revenues are dependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets. In this volatile economic environment, we continue to closely monitor our fixed costs, capital expenditure plans, inventory, and capital resources to respond to changing conditions and to ensure we have the management, business processes, and resources to meet our future needs. We will react quickly and professionally to changes in demand to minimize manufacturing inefficiencies and excess inventory build in periods of decline and maximize opportunities in periods of growth. We believe we have sufficient liquidity to withstand temporary disruptions in the economic environment. See additional information regarding our competitive strengths and key challenges as disclosed in Part I. 31 We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business. See further discussion in “Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. The key financial metrics decreased in the fourth fiscal quarter of 2023 primarily due to the negative impacts of an on-going distributor inventory correction that resulted in lower orders. Net revenues and margins decreased versus the prior year period primarily due to lower volume. Net revenues for the year ended December 31, 2023 were $3.402 billion, compared to net revenues of $3.497 billion and $3.240 billion for the years ended December 31, 2022 and 2021, respectively. Net earnings attributable to Vishay stockholders for the year ended December 31, 2023 were $323.8 million, or $2.31 per diluted share, compared to $428.8 million, or $2.98 per diluted share, and $298.0 million, or $2.05 per share, for the years ended December 31, 2022 and 2021, respectively. We define adjusted net earnings as net earnings determined in accordance with GAAP adjusted for various items that management believes are not indicative of the intrinsic operating performance of our business. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and equipment. The reconciliations below include certain financial measures which are not recognized in accordance with GAAP, including adjusted net earnings, adjusted earnings per share, and free cash. These non-GAAP measures should not be viewed as alternatives to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, and free cash do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that adjusted net earnings and adjusted earnings per share are meaningful because they provide insight with respect to our intrinsic operating results. Management believes that free cash is a meaningful measure of our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends. Net earnings attributable to Vishay stockholders for the years ended December 31, 2023, 2022, and 2021 include items affecting comparability. The items affecting comparability are (in thousands, except per share amounts): Years ended December 31, 2022 2023 2021 GAAP net earnings attributable to Vishay stockholders $ 323,820 $ 428,810 $ 297,970 Reconciling items affecting gross profit: Impact of COVID-19 pandemic Other reconciling items affecting operating income: Impact of COVID-19 pandemic Reconciling items affecting other income (expense): Loss on early extinguishment of debt Reconciling items affecting tax expense (benefit): Effects of changes in uncertain tax positions Effects of changes in valuation allowances Effect of change in indefinite reversal assertion Change in tax laws and regulations Tax effects of pre-tax items above Adjusted net earnings $ $ $ $ - $ 6,661 $ - $ 546 $ 18,874 $ - $ $ - - - - (498) $ (5,941) (33,669) 59,642 - (1,802) $ 342,196 $ 454,247 $ - - - - (5,714) - 45,040 - 337,296 Adjusted weighted average diluted shares outstanding 140,246 143,915 145,495 Adjusted earnings per diluted share $ 2.44 $ 3.16 $ 2.32 32 The following table reconciles gross profit by segment to consolidated gross profit. Direct costs of the COVID-19 pandemic are not allocated to the segments as the chief operating decision maker's evaluation of segment performance does not include these costs (in thousands): MOSFETS Diodes Optoelectronic Components Resistors Inductors Capacitors Unallocated gross profit (loss) Gross profit Years ended December 31, 2022 2021 2023 $ $ 259,386 175,621 62,226 238,428 112,414 126,418 - 974,493 $ $ 274,498 198,105 102,787 262,072 104,349 123,839 (6,661) 1,058,989 $ $ 189,959 168,365 100,737 215,853 107,358 105,641 - 887,913 Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item on the face of our consolidated statements of cash flows prepared in accordance with GAAP. Our free cash results are as follows (in thousands): Years ended December 31, 2022 2023 2021 Net cash provided by continuing operating activities Proceeds from sale of property and equipment Less: Capital expenditures Free cash $ $ $ 365,703 1,156 (329,410) 37,449 $ $ 484,288 1,198 (325,308) 160,178 $ 457,104 1,317 (218,372) 240,049 Orders are lower due to a distributor inventory correction that began in the fourth fiscal quarter of 2022 and continued throughout 2023. Our results for 2023 remained strong, although weaker than our 2022 results. Our free cash results were significantly impacted by the installment payments of the U.S. transition tax of $27.7 million in 2023 and $14.8 million in 2022 and 2021, respectively, and $63.6 million and $25.2 million of payments of foreign, withholding, and claw-back cash taxes on foreign earnings for the $276.8 million and $81.2 million (net of taxes) that were repatriated to the U.S. in 2023 and 2022, respectively. 33 Growth and Company Transformation Initiatives Effective January 1, 2023, a new executive leadership team, promoted from within, embarked on a new era at Vishay. The new executive management team laid out a three-year plan to expand capacity to support our highest growth and highest return product lines and to position Vishay to be ready for the next phase of megatrends in e-mobility, sustainability, and connectivity. The year 2023 is generally seen as the staging year for this plan, and all elements of the plan are progressing throughout the organization. In 2024, we expect to advance many of these initiatives and begin to have increased manufacturing capacity available. Beginning in late 2024 and into 2025, we expect to be in a better position to capture the next step in the growing demand for electrification in our key end-markets. To focus this growth, we have identified product lines for growth across each reportable segment Most of these product lines serve multiple end-market segments, applications, and business channels. We have developed go-to market strategies for each one of these product lines, concentrating our resources on improving the technical performance of non-commodity and custom products, to better position Vishay to support the mega trends toward electrification and data communications. To be ready for this next phase of growth, we intend to invest a total of about $1.2 billion between 2023 and 2025. These projects include our new power inductor site in Mexico; a resistor manufacturing expansion in Mexico; expanded 8" diode manufacturing in Taiwan and Turin, Italy; and the new MOSFET 12” fab in Itzehoe, Germany. Our plan was to invest approximately $385 million in 2023; however, capital spending for 2023 came in at $329 million due to some delays in delivery and installing equipment. We intend to carry over the remaining $56 million into 2024. We have also expanded our external capacity, engaging in developing partnerships with subcontractors to outsource some commodity products and create incremental capacity for our higher growth and higher return products. Each reportable segment is evaluating subcontractors, including supporting front-end capacities for our semiconductor segments. By growing capacity and capabilities, we are also enhancing our ability to support all the business channels of OEM, distribution, and EMS, while maximizing the profitability of each one through a focus on higher margin customers. At the same time, we are focusing on increasing our technical resources, adding additional customer-facing engineers, and intensifying our activities in R&D. We have seen and will continue to see an increase in operating expenses over the next couple of years as we add these engineering talents, fill gaps in our technology, and become a preferred supplier to more customers and more broadly sell our product portfolio. This includes investments in technology, including enhanced Customer Relationship Management and planning tools, to improve our operational excellence. The acquisition of MaxPower and its silicon carbide technology in 2022 is an illustration of this increased investment. During the fourth fiscal quarter, we released our 1,200-volt silicon carbide ("SiC") planar MOSFETs. We are planning to have the SiC package types for three different resistance and current capabilities available during the first half of 2024. In parallel, we continue to advance the development of the 1,200-volt dual-trench technology, the 1,700-volt planar technology, and the 650-volt planar technology. We plan to utilize our pending acquisition of the Newport wafer fab as the home for MaxPower to further develop and scale our SiC capabilities. Another area of focus is our introduction of solution selling, speaking to customer engineers about applications and the performance improvement that Vishay components can bring, from the full array of our portfolio. Customer engineers look for suppliers who can provide solutions to advance their technologies. Vishay’s semiconductors and passive components can populate greater than 80% of the components on the circuit board in many applications. All of this is being done as we implement organizational and structural change at Vishay, focused on a “Think Customer First” philosophy, and becoming a more responsive company. We are fostering collaboration internally and externally, particularly in the functions connected to customer programs. To facilitate that change internally, we re-designed our short- and long-term incentive plans to align the performance of about 1,000 key employees with Company growth and profitability objectives and stockholder interests. The equity-based plan was approved by our stockholders at our 2023 annual meeting. These initiatives are the foundation for our ambitions to unleash the potential at Vishay, realizing the full value of our broad product portfolio and becoming a customer-first company, and for our goals of driving top line growth, expanding margins and optimizing returns. 34 Stockholder Return Policy In 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. We intend to return such amounts to stockholders directly, in the form of dividends, or indirectly, in the form of stock repurchases. The following table summarizes activity pursuant to this policy (in thousands): Dividends paid to stockholders Stock repurchases Total Years ended December 31, 2023 December 31, 2022 $ $ 55,626 78,684 134,310 $ $ 57,187 82,972 140,159 During the fourth quarters of 2022 and 2021, we determined that substantially all unremitted foreign earnings in Germany and Israel, respectively, are no longer indefinitely reinvested. The changes in these indefinite reinvestment assertions will provide greater access to our worldwide cash balances to fund our growth plan and our Stockholder Return Policy, but also increased our effective tax rate. The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders. We will continue to invest in growth initiatives including key product line expansions, targeted R&D, and synergistic acquisitions. We have paid dividends each quarter since the first quarter of 2014, and the Stockholder Return Policy will remain in effect until such time as the Board votes to amend or rescind the policy. Implementation of the Stockholder Return Policy is subject to future declarations of dividends by the Board of Directors, market and business conditions, legal requirements, and other factors. The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. 35 Financial Metrics We utilize several financial metrics to evaluate the performance and assess the future direction of our business. These key financial measures and metrics include net revenues, gross profit margin, operating margin, segment operating income, segment operating margin, end-of-period backlog, and the book-to-bill ratio. We also monitor changes in our inventory turnover and our or publicly available average selling prices (“ASP”). Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but also deducts certain other period costs, particularly losses on purchase commitments and inventory write-downs. Losses on purchase commitments and inventory write-downs have the impact of reducing gross profit margin in the period of the charge, but result in improved gross profit margins in subsequent periods by reducing costs of products sold as inventory is used. We also regularly evaluate gross profit by segment to assist in the analysis of consolidated gross profit. Gross profit margin and gross profit margin by segment are clearly a function of net revenues, but also reflect our cost management programs and our ability to contain fixed costs. Operating margin is computed as gross profit less operating expenses, expressed as a percentage of net revenues. Operating margin is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs. Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment operating income. Only dedicated, direct selling, general, and administrative ("SG&A") expenses of the segments are included in the calculation of segment operating income. We do not allocate certain SG&A expenses that are managed at the regional or corporate global level to our segments. Accordingly, segment operating income excludes these SG&A expenses that are not directly traceable to the segments. Segment operating income would also exclude costs not routinely used in the management of the segments in periods when those items are present, such as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items affecting comparability. Segment operating income is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs. Segment operating margin is segment operating income expressed as a percentage of net revenues. End-of-period backlog is one indicator of future revenues. We include in our backlog only open orders that we expect to ship in the next twelve months. If demand falls below customers’ forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore, the backlog is not necessarily indicative of the results to be expected for future periods. An important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period as compared with the product that we ship during that period. A book-to-bill ratio that is greater than one indicates that our backlog is building and that we are likely to see increasing revenues in future periods. Conversely, a book-to-bill ratio that is less than one is an indicator of declining demand and may foretell declining revenues. We focus on our inventory turnover as a measure of how well we are managing our inventory. We define inventory turnover for a financial reporting period as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory (computed using each fiscal quarter-end balance) for this same period. A higher level of inventory turnover reflects more efficient use of our capital. Pricing in our industry can be volatile. Using our and publicly available data, we analyze trends and changes in average selling prices to evaluate likely future pricing. The erosion of average selling prices of established products is typical for semiconductor products. We attempt to offset this deterioration with ongoing cost reduction activities and new product introductions. Our specialty passive components are more resistant to average selling price erosion. All pricing is subject to governing market conditions and is independently set by us. 36 The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following table shows net revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in ASP for our business as a whole during the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023 (dollars in thousands): Net revenues Gross profit margin Operating margin End-of-period backlog Book-to-bill ratio Inventory turnover Change in ASP vs. prior quarter _______________ 4th Quarter 2022 1st Quarter 2023 2nd Quarter 2023 3rd Quarter 2023 4th Quarter 2023 $ 855,298 $ 871,046 $ 892,110 $ 853,653 $ 785,236 29.1% 15.8% 32.0% 18.2% 28.9% 27.8% 15.1% 13.5% 25.6% 9.9% $ 2,292,700 $ 2,169,400 $ 1,895,100 $ 1,552,400 $ 1,381,800 0.94 3.9 0.84 3.7 0.69 3.9 0.63 3.7 0.75 3.6 0.6% 1.2% (0.7)% (0.8)% (0.7)% See “Financial Metrics by Segment” below for net revenues, book-to-bill ratio, and gross profit margin by segment. Revenues decreased versus the fourth fiscal quarter of 2022 and versus the prior fiscal quarter primarily due to lower sales volume. The book-to-bill ratio and backlog were negatively impacted by the distributor inventory correction that began in 2022 and continued through 2023. We continue to increase manufacturing capacity for critical product lines. Average selling prices decreased versus the fourth fiscal quarter of 2022 and prior fiscal quarter. Gross profit margin decreased versus the prior fiscal quarter and prior year quarter primarily due to lower volume. The book-to-bill ratio in the fourth fiscal quarter of 2023 increased to 0.75 versus 0.63 in the third fiscal quarter of 2023. 37 Financial Metrics by Segment The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023 (dollars in thousands): MOSFETs Net revenues Book-to-bill ratio Gross profit margin 4th Quarter 2022 1st Quarter 2023 2nd Quarter 2023 3rd Quarter 2023 4th Quarter 2023 $ 206,005 $ 198,181 $ 207,388 $ 205,027 $ 168,158 1.15 0.95 0.68 0.50 37.5% 36.8% 34.7% 33.5% Segment operating margin 30.9% 29.3% 27.4% 25.7% Diodes Net revenues Book-to-bill ratio Gross profit margin Segment operating margin Optoelectronic Components Net revenues Book-to-bill ratio Gross profit margin $ 181,791 $ 175,693 $ 174,735 $ 176,788 $ 163,324 0.88 0.71 0.54 0.58 23.4% 27.4% 23.4% 26.7% 19.9% 24.3% 20.1% 23.5% 0.61 24.1% 20.9% $ 63,985 $ 60,403 $ 64,449 $ 64,441 $ 53,853 0.78 0.72 0.70 0.57 0.59 28.1% 36.3% 24.2% 28.1% 12.1% Segment operating margin 20.1% 28.6% 16.7% 20.3% 3.4% Segment operating margin 25.3% 29.9% 25.8% 20.9% Resistors Net revenues Book-to-bill ratio Gross profit margin Inductors Net revenues Book-to-bill ratio Gross profit margin $ 205,161 $ 223,140 $ 222,433 $ 199,877 $ 198,022 0.85 0.88 0.74 0.65 28.3% 33.2% 29.1% 24.6% $ 75,198 $ 80,338 $ 89,239 $ 89,947 $ 87,868 0.83 1.04 0.84 0.85 32.1% 29.5% 34.5% 31.7% Segment operating margin 28.9% 26.1% 30.9% 27.9% Capacitors Net revenues Book-to-bill ratio Gross profit margin Segment operating margin _________ $ 123,158 $ 133,291 $ 133,866 $ 117,573 $ 114,011 0.99 0.70 0.70 0.75 23.7% 28.5% 25.1% 22.1% 19.9% 24.8% 21.0% 17.5% 0.95 25.3% 20.4% 0.62 27.3% 16.8% 0.82 25.6% 22.0% 0.91 33.4% 29.6% 38 Acquisition Activity As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and commercialize, such as MaxPower Semiconductor, Inc. ("MaxPower"), acquired in 2022, and key niche suppliers to vertically integrate our supply chain, such as Centerline Technologies, LLC, acquired in 2023. To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization (“EBITDA”). For these purposes, we calculate pro forma EBITDA as the adjusted EBITDA of Vishay and the target for Vishay’s four preceding fiscal quarters, with a pro forma adjustment for savings which management estimates would have been achieved had the target been acquired by Vishay at the beginning of the four fiscal quarter period. On November 8, 2023, we and Nexperia BV announced that we have entered into an agreement whereby we will acquire Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $177 million in cash, subject to customary post-closing adjustments. The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024. On October 28, 2022, we acquired MaxPower, a San Jose, California-based fabless power semiconductor provider dedicated to delivering innovative and cost- effective technologies that optimize power management solutions. MaxPower's proprietary device structures and process techniques provide leading edge silicon and SiC MOSFET products. Its SiC product development targets automotive and industrial applications. We paid cash of $50.0 million, net of cash acquired, at closing. The transaction also included possible contingent payments of up to $57.5 million, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. One of the contingencies was resolved in the fourth fiscal quarter of 2023, which resulted in no additional payments to the former employees and stockholders of MaxPower. Significant developments occurred in another of the contingencies in January 2024. Our estimate of the maximum possible contingent payments is $17.5 million. MaxPower is included in our MOSFETs segment. The inclusion of this acquisition did not have a material impact on the Company's consolidated results for the years ended December 31, 2023 and 2022. There is no assurance that we will be able to close the transaction for the Nexperia wafer fabrication facility, or identify and acquire additional suitable acquisition candidates at price levels and on terms and conditions we consider acceptable. See Note 2 to our consolidated financial statements. 39 Cost Management We place a strong emphasis on controlling our costs, and use various measures and metrics to evaluate our cost structure. We define variable costs as expenses that vary with respect to quantity produced. Fixed costs do not vary with respect to quantity produced over the relevant time period. Contributive margin is calculated as net revenue less variable costs. It may be expressed in dollars or as a percentage of net revenue. Management uses this measure to determine the amount of profit to be expected for any change in revenues. While these measures are typical cost accounting measures, none of these measures are recognized in accordance with GAAP. The classification of expenses as either variable or fixed is judgmental and other companies might classify such expenses differently. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. We closely monitor variable costs and seek to achieve the contributive margin in our business model. Over a period of many years, we have generally maintained a contributive margin of between 45% and 47% of revenues. The erosion of average selling prices, particularly of our semiconductor products, that is typical of our industry, and inflation negatively impact contributive margin and drive us to continually seek ways to reduce our variable costs. Our variable cost reduction efforts include increasing the efficiency in our production facilities by expending capital for automation, reducing materials costs, materials substitution, increasing wafer size and shrinking dies to maximize efficiency in our semiconductor production processes, and other yield improvement activities. Our cost management strategy also includes a focus on controlling fixed costs recorded as costs of products sold or selling, general, and administrative expenses and maintaining our break-even point (adjusted for acquisitions). We generally seek to limit increases in selling, general, and administrative expenses to the rate of inflation, excluding foreign currency exchange effects and substantially independent of sales volume changes. At constant fixed costs, we would expect each $1 million increase in revenues to increase our operating income by approximately $450,000 to $470,000. Sudden changes in the business conditions, however, may not allow us to quickly adapt our manufacturing capacity and cost structure. During 2023, we implemented the Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan") to enable us to recruit and retain highly qualified employees, directors, consultants and other service providers, provide them with an incentive for productivity, and create an opportunity for them to share in the growth and value of the Company. The 2023 Plan is the first broad-based stock compensation program at Vishay in over 20 years. This program increased operating expenses by $8.8 million in 2023 and is expected to increase operating expenses by between $7 million and $10 million in 2024 versus 2023. Management believes such additional non-cash costs will enhance the long-term performance of the Company by providing selected participants with an incentive to improve the growth and profitability of the Company. Also beginning in 2023, we made and are making significant investments in capital expenditures primarily for capital expansion projects outside of China, which will increase depreciation expense. At the same time, we are focusing on increasing our technical resources, adding additional customer-facing engineers, and intensifying our activities in R&D. We have seen and expect to continue to see an increase in operating expenses over the next couple of years as we add these engineering talents, fill gaps in our technology, and become a preferred supplier to more customers and more broadly sell our product portfolio. Management believes such additional costs will enhance our long-term performance by accelerating our growth. Occasionally, our ongoing cost containment activities are not adequate and we must take actions to maintain our cost competitiveness. We incurred significant restructuring expenses in our past to reduce our cost structure. Historically, our primary cost reduction technique was through the transfer of production to the extent possible from high-labor-cost countries to lower-labor-cost countries. We believe that our manufacturing footprint is suitable to serve our customers and end markets, while maintaining lower manufacturing costs. Since 2013, our cost reduction programs have primarily focused on reducing fixed costs, including selling, general, and administrative expenses. We continue to monitor the economic environment and its potential effects on our customers and the end markets that we serve. We do not anticipate any material restructuring activities in 2024. However, a worsening business environment for the electronics industry or a significant economic downturn may require us to implement additional restructuring initiatives. In uncertain times, we focus on managing our production capacities in accordance with customer requirements, and maintain discipline in terms of our fixed costs and capital expenditures. Even as we seek to manage our costs, we remain cognizant of the future requirements of our demanding markets. We continue to pursue our growth plans through investing in capacities for strategic product lines, and through increasing our resources for R&D, technical marketing, and field application engineering; supplemented by opportunistic acquisitions of specialty businesses. Our long-term strategy includes growth through the integration of acquired businesses, and GAAP requires plant closure and employee termination costs that we incur in connection with our acquisition activities to be recorded as expenses in our consolidated statement of operations, as such expenses are incurred. We have not incurred any material plant closure or employee termination costs related to any of the businesses acquired since 2011, but we expect to have some level of future restructuring expenses due to acquisitions. 40 Foreign Currency Translation We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries. We occasionally use forward exchange contracts to economically hedge a portion of our projected cash flows from these exposures. GAAP requires that entities identify the “functional currency” of each of their subsidiaries and measure all elements of the financial statements in that functional currency. A subsidiary’s functional currency is the currency of the primary economic environment in which it operates. In cases where a subsidiary is relatively self- contained within a particular country, the local currency is generally deemed to be the functional currency. However, a foreign subsidiary that is a direct and integral component or extension of the parent company’s operations generally would have the parent company’s currency as its functional currency. We have both situations among our subsidiaries. Foreign Subsidiaries which use the Local Currency as the Functional Currency We finance our operations in Europe and certain locations in Asia in local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated balance sheets have been translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the results of operations and are reported as a separate component of stockholders’ equity. For those subsidiaries where the local currency is the functional currency, revenues and expenses are translated at the average exchange rate for the year. While the translation of revenues and expenses into U.S. dollars does not directly impact the consolidated statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies. The dollar was weaker during 2023 versus 2022, but stronger during 2022 versus 2021, with the translation of foreign currency revenues and expenses into U.S. dollars increasing reported revenues and expenses in 2023 versus 2022, but decreasing reported revenues and expenses in 2022 versus 2021. Foreign Subsidiaries which use the U.S. Dollar as the Functional Currency Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the results of operations. While these subsidiaries transact most business in U.S. dollars, they may have significant costs, particularly payroll-related, which are incurred in the local currency. The cost of products sold and selling, general, and administrative expense have been favorably impacted for the year ended December 31, 2023 compared to 2022 and for the year ended December 31, 2022 compared to 2021 by local currency transactions of subsidiaries which use the U.S. dollar as their functional currency. See Item 7A for additional discussion of foreign currency exchange risk. 41 Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number of policies that entail significant judgments or estimates. Revenue Recognition Revenue is measured based on the consideration specified in contracts with customers, and excludes any sales incentives and amounts collected on behalf of third parties. We recognize revenue when we satisfy our performance obligations. We have a broad line of products that we sell to OEMs, electronic manufacturing services ("EMS") companies, which manufacture for OEMs on an outsourcing basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS companies. We recognize revenue on sales to distributors when the distributor takes control of the products ("sold-to" model). We have agreements with distributors that allow distributors a limited credit for unsaleable products, which we refer to as a "scrap allowance." Consistent with industry practice, we also have a "stock, ship and debit" program whereby we consider requests by distributors for credits on previously purchased products that remain in distributors' inventory, to enable the distributors to offer more competitive pricing. In addition, we have contractual arrangements whereby we provide distributors with protection against price reductions initiated by us after product is sold by us to the distributor and prior to resale by the distributor. We recognize the estimated variable consideration to be received as revenue and record a related accrued expense for the consideration not expected to be received, based upon an estimate of product returns, scrap allowances, "stock, ship and debit" credits, and price protection credits that will be attributable to sales recorded through the end of the period. We make these estimates based upon sales levels to our customers during the period, inventory levels at the distributors, current and projected market conditions, and historical experience under the programs. We utilize a number of different methodologies and consider several factors when estimating the accruals. Some of the factors that we consider are sales levels to customers during the relevant period, inventory levels at the distributors, current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits. These procedures require the exercise of significant judgments. We believe that we have a reasonable basis to estimate future credits under the programs. See Notes 1 and 9 to our consolidated financial statements for further information. Inventories We value our inventories at the lower of cost or net realizable value, with cost determined under the first-in, first-out method. The valuation of our inventories requires our management to make market estimates. For work in process goods, we are required to estimate the cost to completion of the products and the prices at which we will be able to sell the products. For finished goods, we must assess the prices at which we believe the inventory can be sold. Inventories are also adjusted for estimated obsolescence and written down to net realizable value based on age of the inventory and upon estimates of future demand, technology developments, and market conditions. Goodwill See Note 1 to our consolidated financial statements for a description of our goodwill impairment tests. The fair value of reporting units for goodwill impairment testing purposes is measured primarily using present value techniques based on projected cash flows from the reporting unit. The calculated results are evaluated for reasonableness using comparable company data. The determination of the fair value of the reporting units requires us to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in the industries in which we compete; the discount rate; terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures. Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates. In addition, changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the fair value of the reporting unit and the amount of the goodwill impairment charge. 42 Pension and Other Postretirement Benefits Our defined benefit plans are concentrated in the United States, Germany, and the Republic of China (Taiwan). At December 31, 2023, our U.S. plans include various non-qualified plans. The table below summarizes information about our pension and other postretirement benefit plans. This information should be read in conjunction with Note 11 to our consolidated financial statements (amounts in thousands): U.S. non-qualified pension plans German pension plans Taiwanese pension plans Other pension plans OPEB plans Other retirement obligations Benefit obligation $ $ 30,691 132,627 43,385 34,771 11,823 11,087 264,384 Plan assets - $ - 35,826 27,461 - - 63,287 $ $ $ Funded position (30,691) (132,627) (7,559) (7,310) (11,823) (11,087) (201,097) Informally funded assets 21,540 $ 4,115 - - - - 25,655 $ Net position $ (9,151) $ (128,512) (7,559) (7,310) (11,823) (11,087) (175,442) $ $ Unrecognized actuarial items (522) 17,261 5,198 2,432 (39) - 24,330 Accounting for defined benefit pension and other postretirement plans involves numerous assumptions and estimates. The discount rate at which obligations could effectively be settled and the expected long-term rate of return on plan assets are two critical assumptions in measuring the cost and benefit obligations of our pension and other postretirement benefit plans. Other important assumptions include the anticipated rate of future increases in compensation levels, estimated mortality, and for certain postretirement medical plans, increases or trends in health care costs. Management reviews these assumptions at least annually. We use independent actuaries and investment advisers to assist us in formulating assumptions and making estimates. These assumptions are updated periodically to reflect the actual experience and expectations on a plan specific basis as appropriate. In the U.S., we utilize published long-term high quality bonds to determine the discount rate at the measurement date. In Germany and the Republic of China (Taiwan), we utilize published long-term government bond rates to determine the discount rate at the measurement date. We utilize bond yields at various maturity dates that reflect the timing of expected future benefit payments. We believe the discount rates selected are the rates at which these obligations could effectively be settled. Non-qualified plans in the U.S. are considered by law to be unfunded. However, the Company maintains assets in a rabbi trust to fund benefit payments under certain of these plans. Such assets would be subject to creditor claims under certain conditions. (See also Notes 11 and 18 to our consolidated financial statements.) Many of our non-U.S. plans are unfunded based on local laws and customs. For those non-U.S. plans that do maintain investments, their asset holdings are primarily cash and fixed income securities, based on local laws and customs. Some non-U.S. plans also informally fund their plans by holding certain available-for- sale investments. Such assets would be subject to creditor claims under certain conditions. (See also Note 18 to our consolidated financial statements.) We set the expected long-term rate of return based on the expected long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this rate, we consider historical and expected returns for the asset classes in which the plans are invested, advice from pension consultants and investment advisors, and current economic and capital market conditions. The expected return on plan assets is incorporated into the computation of pension expense. The difference between this expected return and the actual return on plan assets is deferred. The net deferral of past asset losses (gains) affects the calculated value of plan assets and, ultimately, future pension expense (income). We continue to seek to de-risk our global pension exposures. Such actions could result in increased net periodic pension cost due to lower expected rates of return on plan assets and/or possible additional charges to recognize unamortized actuarial items if all or a portion of the obligations were to be settled. We believe that the current assumptions used to estimate plan obligations and annual expenses are appropriate. However, if economic conditions change or if our investment strategy changes, we may be inclined to change some of our assumptions, and the resulting change could have a material impact on the consolidated statements of operations and on the consolidated balance sheet. 43 Income Taxes We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances and the provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. These accruals for tax-related uncertainties are based on our best estimate of potential tax exposures. When particular matters arise, a number of years may elapse before such matters are audited by tax authorities and finally resolved. Favorable resolution of such matters could be recognized as a reduction to our effective tax rate in the year of resolution. Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution. During 2023, certain tax examinations were concluded and certain statutes of limitations lapsed. Our tax provision for those years includes adjustments related to the resolution of these matters. We settled an examination of our U.S. federal income tax returns for the periods ended December 31, 2017 through 2019. Our federal income tax returns for subsequent years remain subject to examination. The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2022). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination. See Notes 1 and 5 to consolidated financial statements for additional information. 44 Results of Operations Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Costs of products sold Gross profit Selling, general, and administrative expenses Operating income Income before taxes and noncontrolling interest Net earnings attributable to Vishay stockholders ________ Effective tax rate Net Revenues Net revenues were as follows (dollars in thousands): Net revenues Change versus prior year Percentage change versus prior year Changes in net revenues were attributable to the following: Change attributable to: Change in volume Increase in average selling prices Foreign currency effects Acquisitions Other Net change Years ended December 31, 2022 2021 2023 71.4% 28.6% 14.4% 14.3% 13.7% 9.5% 69.7% 30.3% 12.7% 17.6% 17.0% 12.3% 30.4% 27.5% 72.6% 27.4% 13.0% 14.4% 13.4% 9.2% 31.2% 2023 2022 2021 $ $ 3,402,045 (95,356) $ $ (2.7)% 3,497,401 256,914 $ 3,240,487 7.9% 2023 vs. 2022 2022 vs. 2021 (5.2)% 1.7% 0.7% 0.2% (0.1)% (2.7)% 4.3% 7.2% (4.0)% 0.4% 0.0% 7.9% Despite the inventory correction that we are experiencing, the long-term prospects for our business remain favorable, and we continue to increase manufacturing capacities for critical product lines. The decrease in net revenues in 2023 is primarily sales volume-driven, partially offset by increased average selling prices. The increase in net revenues in 2022 was primarily due to increased sales volume and average selling prices. Gross Profit and Margins Gross profit margins for the year ended December 31, 2023 were 28.6%, as compared to 30.3% for the year ended December 31, 2022. The decrease in gross profit margin is primarily due to decreased sales volume. Higher labor, materials, and utilities costs also negatively impacted the gross profit margin. 45 Segments Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments. MOSFETs Net revenues of the MOSFETs segment were as follows (dollars in thousands): Net revenues Change versus comparable prior year period Percentage change versus comparable prior year period Changes in MOSFETs segment net revenues were attributable to the following: Change attributable to: Change in volume Increase in average selling prices Foreign currency effects Acquisition Other Net change Gross profit margins and segment operating margins for the MOSFETs segment were as follows: Gross profit margin Segment operating margin Years ended December 31, 2022 2023 2021 $ $ 778,754 16,494 $ $ 2.2% 762,260 94,262 $ 667,998 14.1% 2023 vs. 2022 2022 vs. 2021 (1.8)% 2.3% 0.5% 1.0% 0.2% 2.2% 4.1% 11.8% (2.4)% 0.1% 0.5% 14.1% Years ended December 31, 2022 2021 2023 33.3% 25.1% 36.0% 30.0% 28.4% 22.3% Net revenues of the MOSFETs segment increased slightly in 2023 versus the prior year. The increase is primarily due to increased sales to automotive, power supply, and industrial end market customers in the Europe region, partially offset decreased sales to customers in the Americas and Asia regions. The gross profit margin in 2023 decreased versus the prior year primarily due to higher utilities, labor, and repair and maintenance costs. The segment operating margin decreased versus the prior year primarily due to decreased gross profit. Increased segment SG&A expenses primarily due to acquisition-related expenses also contributed to the decrease. Average selling prices increased versus the prior year. We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines. We have begun building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% within 2-3 years and allow us to balance our in-house and foundry wafer supply. We acquired leading edge silicon and silicon carbide MOSFETs products with our acquisition of MaxPower in the fourth fiscal quarter of 2022. Our pending acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment. 46 Diodes Net revenues of the Diodes segment were as follows (dollars in thousands): Net revenues Change versus comparable prior year period Percentage change versus comparable prior year period Changes in Diodes segment net revenues were attributable to the following: Change attributable to: Change in volume Increase in average selling prices Foreign currency effects Other Net change Gross profit margins and segment operating margins for the Diodes segment were as follows: Gross profit margin Segment operating margin Years ended December 31, 2022 2023 2021 $ $ 690,540 (74,680) $ $ (9.8)% 765,220 55,804 $ 709,416 7.9% 2023 vs. 2022 2022 vs. 2021 (11.0)% 1.0% 0.4% (0.2)% (9.8)% 1.8% 9.7% (3.7)% 0.1% 7.9% Years ended December 31, 2022 2021 2023 25.4% 22.2% 25.9% 23.1% 23.7% 20.6% Net revenues of the Diodes segment decreased significantly in 2023. The decrease is primarily due to decreased sales to distribution and EMS customers, power supply end market customers, and customers in the Americas and Asia regions, partially offset by increased sales to automotive end market customers. Gross profit margin decreased versus the prior year primarily due to lower sales volume and higher materials, labor, and fixed costs, partially offset by higher average selling prices. Segment operating margin decreased versus the prior year primarily due to decreased gross profit. Average selling prices increased versus the prior year. 47 Optoelectronic Components Net revenues of the Optoelectronic Components segment were as follows (dollars in thousands): Net revenues Change versus comparable prior year period Percentage change versus comparable prior year period Changes in Optoelectronic Components segment net revenues were attributable to the following: Change attributable to: Decrease in volume Increase in average selling prices Foreign currency effects Other Net change Years ended December 31, 2022 2023 2021 $ $ 243,146 (53,238) $ $ (18.0)% 296,384 (6,330) $ 302,714 (2.1)% 2023 vs. 2022 2022 vs. 2021 (19.2)% 0.5% 0.9% (0.2)% (18.0)% (3.6)% 6.7% (4.7)% (0.5)% (2.1)% Gross profit margins and segment operating margins for the Optoelectronic Components segment were as follows: Gross profit margin Segment operating margin Years ended December 31, 2022 2021 2023 25.6% 17.7% 34.7% 28.8% 33.3% 27.2% Net revenues of the Optoelectronic Components segment decreased significantly versus the prior year. The decrease was primarily due to general consumer weakness that impacted many of the products we sell. The result was decreased sales to distribution customers and customers in all regions. We expect long-term growth for this segment. The gross profit margin decreased versus the prior year. The decrease is primarily due to lower sales volume, higher materials, services, labor, and utilities costs, and inventory and higher depreciation expense. The segment operating margin decreased primarily due to the decrease in gross profit. Average selling prices increased versus the prior year. We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany. 48 Resistors Net revenues of the Resistors segment were as follows (dollars in thousands): Net revenues Change versus comparable prior year period Percentage change versus comparable prior year period Changes in Resistors segment net revenues were attributable to the following: Change attributable to: Change in volume Increase in average selling prices Foreign currency effects Acquisitions Other Net change Gross profit margins and segment operating margins for the Resistors segment were as follows: Gross profit margin Segment operating margin Years ended December 31, 2022 2023 2021 $ $ 843,472 10,666 $ $ 1.3% 832,806 80,252 $ 752,554 10.7% 2023 vs. 2022 2022 vs. 2021 (1.4)% 1.8% 1.0% 0.0% (0.1)% 1.3% 10.4% 4.6% (5.6)% 1.5% (0.2)% 10.7% Years ended December 31, 2022 2021 2023 28.3% 24.8% 31.5% 28.2% 28.7% 25.4% Net revenues of the Resistors segment increased slightly versus the prior year. The increase was primarily due to increased sales to military and aerospace, automotive, and industrial end market customers and customers in the Europe region, partially offset by decreased sales to distribution customers. The gross profit margin decreased versus the prior year. The decrease is due to lower sales volume, higher labor and materials costs, and other inflationary impacts, partially offset by increased average selling prices, lower metals and logistics costs, and favorable exchange rate impacts. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices increased versus the prior year. We are increasing critical manufacturing capacities for certain product lines. We continue to broaden our business with targeted acquisitions of specialty resistors businesses. 49 Inductors Net revenues of the Inductors segment were as follows (dollars in thousands): Net revenues Change versus comparable prior year period Percentage change versus comparable prior year period Changes in Inductors segment net revenues were attributable to the following: Change attributable to: Change in volume Increase in average selling prices Foreign currency effects Other Net change Gross profit margins and segment operating margins for the Inductors segment were as follows: Gross profit margin Segment operating margin Years ended December 31, 2022 2023 2021 $ $ 347,392 16,306 $ $ 4.9% 331,086 (4,552) $ 335,638 (1.4)% 2023 vs. 2022 2022 vs. 2021 2.4% 1.9% 0.5% 0.1% 4.9% (0.8)% 1.2% (1.8)% 0.0% (1.4)% Years ended December 31, 2022 2021 2023 32.4% 28.7% 31.5% 28.2% 32.0% 29.0% Net revenues of the Inductors segment increased moderately versus the prior year. The increase is primarily due to increased sales to EMS customers, medical, automotive, and military and aerospace end market customers, and customers in the Americas and Europe regions, partially offset by decreased sales to distribution customers, industrial and telecommunications end market customers, and customers in the Asia region. The gross profit margin increased versus the prior year. The increase is primarily due to increased average selling prices, higher sales volume, lower logistics and metals prices, and positive foreign currency impacts, partially offset by higher labor and materials costs, other inflationary impacts, and start-up costs of a new manufacturing facility. Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit. Average selling prices increased versus the prior year. We expect long-term growth in this segment, and are continuously expanding manufacturing capacity for certain product lines and evaluating acquisition opportunities, particularly of specialty businesses. We have greatly increased our manufacturing capacity for power inductors in the past year. 50 Capacitors Net revenues of the Capacitors segment were as follows (dollars in thousands): Net revenues Change versus comparable prior year period Percentage change versus comparable prior year period Changes in Capacitors segment net revenues were attributable to the following: Change attributable to: Change in volume Increase in average selling prices Foreign currency effects Other Net change Gross profit margins and segment operating margins for the Capacitors segment were as follows: Gross profit margin Segment operating margin Years ended December 31, 2022 2023 2021 $ $ 498,741 (10,904) $ $ (2.1)% 509,645 37,478 $ 472,167 7.9% 2023 vs. 2022 2022 vs. 2021 (5.1)% 2.2% 0.9% (0.1)% (2.1)% 8.0% 5.6% (5.5)% (0.2)% 7.9% Years ended December 31, 2022 2021 2023 25.3% 21.1% 24.3% 20.6% 22.4% 18.1% Net revenues of the Capacitors segment decreased slightly versus the prior year. The decrease is primarily due to decreased sales to distribution and EMS customers and customers in the Americas and Asia regions, partially offset by increased sales to industrial end market customers. The gross profit margin increased versus the prior year. The increase is due to increased average selling prices, positive impact of product mix, positive foreign currency impacts, and lower metals, freight, and utility costs, partially offset by lower sales volume and higher labor and tantalum costs. Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit. Average selling prices have increased versus the prior year. 51 Selling, General, and Administrative Expenses Selling, general, and administrative expenses are summarized as follows (dollars in thousands): Total SG&A expenses as a percentage of sales Years ended December 31, 2022 2021 2023 $ 488,349 $ 443,503 $ 420,111 14.4% 12.7% 13.0% SG&A expenses for the year ended December 31, 2023 increased versus the year ended December 31, 2022 due to general inflation and higher compensation costs, including the implementation of the 2023 Long-Term Incentive Plan in 2023. Other Income (Expense) 2023 Compared to 2022 Interest expense for the year ended December 31, 2023 increased by $8.0 million versus the year ended December 31, 2022. The increase is primarily due to higher interest rates and higher average balances outstanding on the revolving credit facility in 2023 prior to September 2023 when it was paid down to $0. The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands): Years ended December 31, 2023 2022 Change Foreign exchange gain (loss) Interest income Other components of net periodic pension expense Investment income (loss) Other 2022 Compared to 2021 $ $ $ 677 31,353 (8,730) 1,347 616 25,263 $ $ 5,690 7,560 (11,090) (6,812) (200) (4,852) $ (5,013) 23,793 2,360 8,159 816 30,115 Interest expense for the year ended December 31, 2022 decreased by $0.4 million versus the year ended December 31, 2021. The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands): Foreign exchange gain (loss) Interest income Other components of net periodic pension expense Investment income (loss) Other Years ended December 31, 2022 2021 Change $ $ $ 5,690 7,560 (11,090) (6,812) (200) (4,852) $ (2,692) $ 1,269 (13,206) (1,036) 11 (15,654) $ 8,382 6,291 2,116 (5,776) (211) 10,802 52 Income Taxes For the years ended December 31, 2023, 2022, and 2021, the effective tax rates were 30.4%, 27.5%, and 31.2%, respectively. With the reduction in the U.S. statutory rate to 21% beginning January 1, 2018, we expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions. Historically, the effective tax rates were generally less than the U.S. statutory rate of 35% primarily because of earnings in foreign jurisdictions. Discrete tax items impacted our effective tax rate for each period presented. These items were $20.0 million in 2022 and $39.3 million in 2021. There were no unusual tax transactions that impacted the effective tax rate for the year ended December 31, 2023. The effective tax rate for the year ended December 31, 2022 was impacted by $5.9 million of tax benefits recognized for changes in uncertain tax positions following the resolution of a tax audit, $59.6 million of tax expense recognized upon the change in indefinite reversal assertion on earnings in Germany, and $33.7 million of tax benefits recognized upon the release of a valuation allowance. We made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany are no longer indefinitely reinvested. We recorded additional tax expense during the fourth fiscal quarter of 2022 to accrue the $59.6 million of withholding taxes necessary to distribute these approximately $360.0 million of accumulated earnings to the United States. The effective tax rate for the year ended December 31, 2021 was impacted by $53.3 million of tax expense recognized upon a change in Israeli tax law that was enacted on November 15, 2021. We have historically benefited from tax incentive programs offered by the Israeli government, including the generation of income not subject to current income tax. Any tax-exempt earnings generated under these programs would incur an additional “claw-back” tax at approximately 11.1% if they were distributed or invested outside of Israel, in addition to normal withholding taxes on earnings distributed from Israel. Otherwise, taxes on such earnings were indefinitely deferred. The change in Israeli tax law provided companies with an election to currently pay a reduced claw-back rate of as low as 6% upon meeting certain conditions, with the ability to distribute or invest those amounts outside of Israel at any time in the future. We elected to pay taxes on all previously untaxed earnings at the reduced 6% claw-back rate. As a direct result of this change in tax law, we made the determination during the fourth fiscal quarter of 2021 that substantially all unremitted foreign earnings in Israel are no longer permanently reinvested. We recorded the additional tax expense during the fourth fiscal quarter of 2021 to accrue the claw- back tax on applicable earnings and withholding taxes necessary to distribute these approximately $385.0 million of accumulated earnings to the United States. We repatriated $81.2 million (net of taxes) to the United States in 2022 pursuant to this repatriation program. We paid withholding taxes, foreign taxes, and Israeli clawback taxes of $25.2 million due to the repatriation. The effective tax rate for the year ended December 31, 2021 was also impacted by a $5.7 million tax benefit recognized upon the release of a valuation allowance and $8.3 million of tax benefits recognized due to changes in tax regulations. We operate in a global environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate. Part of our historical strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations to countries where we can take advantage of lower labor costs and available tax and other government-sponsored incentives. Additional information about income taxes is included in Note 5 to our consolidated financial statements. 53 Financial Condition, Liquidity, and Capital Resources Our financial condition as of December 31, 2023 continued to be strong. Cash and short-term investments exceed our long-term debt balances, and we have historically been a strong generator of operating cash flows. The cash generated from operations is used to fund our capital expenditure plans, and cash in excess of our capital expenditure needs is available to fund our acquisition strategy, to reduce debt levels, and to pay dividends and repurchase stock. Management uses a non-GAAP measure, "free cash," to evaluate our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends. See "Overview" above for "free cash" definition and reconciliation to GAAP. Cash flows provided by operating activities were $365.7 million for the year ended December 31, 2023, as compared to cash flows provided by operations of $484.3 million for the year ended December 31, 2022. In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle. The following table presents the components of our cash conversion cycle during the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023: Days sales outstanding ("DSO") (a) Days inventory outstanding ("DIO") (b) Days payable outstanding ("DPO") (c) Cash conversion cycle 4th Quarter 2022 1st Quarter 2023 2nd Quarter 2023 3rd Quarter 2023 4th Quarter 2023 45 93 (31) 107 45 98 (32) 111 46 94 (32) 108 48 96 (33) 111 50 101 (31) 120 a) DSO measures the average collection period of our receivables. DSO is calculated by dividing the average accounts receivable by the average net revenue per day for the respective fiscal quarter. b) DIO measures the average number of days from procurement to sale of our product. DIO is calculated by dividing the average inventory by average cost of goods sold per day for the respective fiscal quarter. c) DPO measures the average number of days our payables remain outstanding before payment. DPO is calculated by dividing the average accounts payable by the average cost of goods sold per day for the respective fiscal quarter. Cash paid for property and equipment for the year ended December 31, 2023 was $329.4 million, as compared to $325.3 million for the year ended December 31, 2022. To be well positioned to service our customers and to fully participate in growing markets, we have increased and expect to maintain a relatively high level of capital expenditures for expansion in the mid-term. We expect to invest approximately $450 million in 2024 and approximately $1.2 billion from 2023 to 2025 primarily for capital expansion projects outside of China. Free cash flow for the year ended December 31, 2023 decreased versus the year ended December 31, 2022 primarily due to decreased net earnings, increased transition and repatriation taxes paid, and a working capital increase. We expect that free cash flow will be negatively impacted by the expected high level of capital expenditures for expansion in 2023 - 2025 after which we expect to generate increasingly higher levels of free cash. There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment worsens. In 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. See “Stockholder Return Policy” above for additional information. The following table summarizes the components of net cash and short-term investments (debt) (in thousands): Credit facility Convertible senior notes, due 2025 Convertible senior notes, due 2030 Deferred financing costs Total debt Cash and cash equivalents Short-term investments Net cash and short-term investments (debt) December 31, 2023 December 31, 2022 $ $ - 95,102 750,000 (26,914) 818,188 972,719 35,808 42,000 465,344 - (6,407) 500,937 610,825 305,272 $ 190,339 $ 415,160 "Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP. This measure should not be viewed as an alternative to GAAP measures of performance or liquidity. However, management believes that an analysis of "net cash and short-term investments (debt)" assists investors in understanding aspects of our cash and debt management. The measure, as calculated by us, may not be comparable to similarly titled measures used by other companies. We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we classify as short- term investments on our consolidated balance sheets. As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt). 54 The interest rates on our short-term investments vary by location. Transactions related to these investments are classified as investing activities on our consolidated statements of cash flows. We aligned the maturity dates of our cash equivalents and short-term investments in preparation of the planned cash repatriation that was completed in the fourth fiscal quarter of 2023, which resulted in a decrease in our short-term investment balance. As of December 31, 2023, 65.5% of our cash and cash equivalents and short-term investments were held in countries outside of the United States. Cash dividends to stockholders, share repurchases, and principal and interest payments on our debt instruments need to be paid by the U.S. parent company, Vishay Intertechnology, Inc. A U.S.-domiciled subsidiary is expected to be the acquiring entity of Nexperia's wafer fabrication facility and operations in Newport, South Wales, U.K. Our U.S. subsidiaries also have cash operating needs. The recent distribution of earnings from Israel and Germany to the United States will be used to fund our Stockholder Return Policy and the Nexperia transaction. We expect that cash on-hand and cash flows from operations will be sufficient to meet our longer-term financing needs related to normal operating requirements, regular dividend payments, share repurchases pursuant to our Stockholder Return Policy, and our research and development and capital expenditure plans. Our substantially undrawn credit facility provides us with significant operating liquidity in the United States. On May 8, 2023, we amended and restated our $750 million revolving credit agreement, which replaced our credit agreement that was scheduled to mature in June 2024. The amendment and restatement extended the maturity date of the revolving credit agreement until May 8, 2028. The maximum amount available on the revolving credit facility is restricted by the financial covenants described below. The credit facility also provides us the ability to request up to $300 million of incremental facilities, subject to the satisfaction of certain conditions, which could take the form of additional revolving commitments, incremental “term loan A” or “term loan B” facilities, or incremental equivalent debt. We had $42 million outstanding on our revolving credit facility at December 31, 2022 and no amounts outstanding at December 31, 2023. We borrowed $501 million and repaid $543 million on the revolving credit facility during the year ended December 31, 2023. The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $93.3 million and the highest amount outstanding on our revolving credit facility at a fiscal month end was $185 million during the year ended December 31, 2023. We used $185 million of the net proceeds from the convertible senior notes due 2030 to repay amounts outstanding on the revolving credit facility in the third fiscal quarter of 2023. The amendment and restatement of the facility replaced the leverage ratio used for compliance measurement with a net leverage ratio, reducing the measure of outstanding debt by up to $250 million of unrestricted cash. Measurements prior to the amendment and restatement were based on a total leverage ratio. Pursuant to the credit facility, the financial maintenance covenants include (a) an interest coverage ratio of not less than 2.00 to 1; and (b) a net leverage ratio of not more than 3.25 to 1 (and a pro forma ratio of 3.00 to 1 on the date of incurrence of additional debt). The computation of these ratios is prescribed in Article VI of the Credit Agreement between Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., which was filed with the SEC as Exhibit 10.1 to our current report on Form 8-K filed May 8, 2023. The revolving credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming our pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma net leverage ratio is greater than 2.50 to 1.00). We were in compliance with all financial covenants under the credit facility at December 31, 2023. Our interest coverage ratio and net leverage ratio were 17.83 to 1 and 0.84 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections. If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and any amounts then outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible senior notes due 2025 and due 2030 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated. The maturity date of the amended and restated credit facility will accelerate if within ninety-one days prior to the maturity of our convertible senior notes due 2025, the outstanding principal amount of such notes exceeds a defined liquidity measure as set forth in the credit facility. The repurchase of $370.2 million principal amount of convertible senior notes due 2025 in the third fiscal quarter of 2023 reduces the risk that the maturity date of the credit facility will accelerate. Borrowings under the credit facility bear interest at variable reference rates plus an interest margin. The applicable interest margin is based on our total leverage ratio. We also pay a commitment fee, also based on our total leverage ratio, on undrawn amounts. U.S. dollar borrowings under the revolving credit agreement are based on SOFR (including a customary spread adjustment). Borrowings in foreign currencies bear interest at currency-specific reference rates plus an interest margin. Based on our current total leverage ratio of 1.19 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 1.60% (including the applicable credit spread), and the undrawn commitment fee is 0.25% per annum. The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain subsidiaries; and are guaranteed by certain significant subsidiaries. We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our revolving credit facility. We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs. Additional acquisition activity, convertible debt repurchases, or conversion of our convertible debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on our debt are due before 2025. 55 On September 12, 2023, we issued $750 million convertible senior notes due 2030. We used the net proceeds from the issuance of these notes to repurchase $370.2 million principal amount of convertible senior notes due 2025, to pay $94.2 million to enter into capped call transactions intended to mitigate the dilution risk of convertible senior notes due 2030 by synthetically increasing the conversion price of the notes to approximately $43.98 per share, to repay amounts outstanding on our amended and restated credit facility, and for other general corporate purposes. Prior to six months before the maturity date, our convertible senior notes due 2030 are convertible by the holders under certain circumstances. The convertible senior notes due 2030 are not convertible as of September 30, 2023 and will not be contingently convertible before the first fiscal quarter of 2024. Pursuant to the indenture governing the convertible senior notes due 2030, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in cash or shares of our common stock. We intend to finance the principal amount of any converted senior notes due 2030 using borrowings under our credit facility. The transactions effectively refinanced the majority of the convertible senior notes due 2025 for five additional years at the same coupon interest rate, reduced future interest expense due to the paydown of the revolving credit facility, and enhanced our U.S. liquidity position to execute our growth initiatives. The remaining convertible senior notes due 2025 are not currently convertible. Pursuant to the indenture governing the convertible senior notes due 2025 and the amendments thereto incorporated in the Supplemental Indenture dated December 23, 2020, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in shares of our common stock. We intend to finance the principal amount of any converted notes using borrowings under our credit facility. No conversions have occurred to date. 56 In evaluating our liquidity and capital resources, we consider our outstanding commitments. As of December 31, 2023 our commitments were as follows (in thousands): Total 2024 2025 Payments due by period 2027 2026 2028 Thereafter Long-term debt Interest payments on long-term debt Operating leases Letters of credit Expected pension and postretirement plan $ funding Estimated costs to complete construction in progress Estimated costs to complete MOSFETs wafer fab Remaining cost to acquire Newport wafer fab TCJA transition tax Uncertain tax positions Purchase commitments Other long-term liabilities Total contractual cash obligations $ 845,102 125,259 173,166 1,422 194,504 156,900 345,600 168,250 84,649 13,847 87,583 74,071 2,270,353 $ $ - 21,064 27,474 - 19,144 135,600 119,900 168,250 37,622 - 57,824 - 586,878 $ $ 95,102 19,905 24,235 - 19,871 19,900 177,700 - 47,027 - 29,109 - 432,849 $ $ - 18,924 19,692 - 20,388 1,400 48,000 - - - 650 - 109,054 $ $ - 18,924 17,802 - 25,113 - - - - - - - 61,839 $ $ - 17,614 15,154 1,422 19,143 - - - - - - - 53,333 $ $ 750,000 28,828 68,809 - 90,845 - - - - 13,847 - 74,071 1,026,400 Commitments for long-term debt are based on the amount required to settle the obligation. Accordingly, the capitalized deferred financing costs associated with our convertible notes are excluded from the calculation of long-term debt commitments in the table above. Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement and include fees under our revolving credit facility, which expires on May 8, 2028. Commitments for interest payments on long-term debt exclude non-cash interest expense related to the amortization of deferred financing costs. Various factors could have a material effect on the amount of future principal and interest payments. Principal and interest commitments associated with our convertible notes are based on the amounts outstanding as of December 31, 2023. Additionally, interest commitments for our revolving credit facility are based on the rate prevailing at December 31, 2023, but actual rates are variable and are certain to change over time. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years through 2025. Estimated costs to complete the MOSFETs wafer fab include amounts that we are not contractually required to complete. On November 8, 2023, Vishay and Nexperia BV announced that we have entered into an agreement whereby we will acquire Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $177.0 million in cash. On November 8, 2023, we remitted $8.75 million to an escrow account as a deposit for this agreement. The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024. Our consolidated balance sheet at December 31, 2023 includes liabilities associated with uncertain tax positions in multiple taxing jurisdictions where we conduct business. Due to the uncertain and complex application of tax regulations, combined with the difficulty in predicting when tax audits throughout the world may be concluded, we cannot make reliable estimates of the timing of the remaining cash outflows relating to these liabilities. Accordingly, we have classified all non-current uncertain tax positions as payments due thereafter, although actual timing of payments may be sooner. Expected pension and postretirement plan funding is based on a projected schedule of benefit payments under the plans. We maintain long-term arrangements with subcontractors, suppliers, and other business partners to ensure access to external capacity and supplies for certain products. The purchase commitments in the table above represent the estimated minimum commitments under these arrangements. Our actual purchases in future periods are expected to be greater than these minimum commitments. Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December 31, 2023. We include the current portion of the long-term liabilities in the table above. Other long-term liabilities for which we are unable to reasonably estimate the timing of the settlement are classified as payments due thereafter in the table above, although actual timing of payments may be sooner. For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchase commitments, see Notes 2, 4, 5, 6, 11, and 13 to our consolidated financial statements. 57 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Disclosure We are exposed to certain financial risks, including fluctuations in foreign currency exchange rates, interest rates, and commodity prices. We manage our exposure to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. Our policies do not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. We do not use financial instruments for trading purposes and we are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on an ongoing basis and believe that we can modify or adapt our hedging strategies as needed. Interest Rate Risk We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. On a selective basis, we have in the past entered into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on our outstanding variable rate debt. As of December 31, 2023, 2022, and 2021 we did not have any outstanding interest rate swap or cap agreements. The interest paid on our credit facilities is based on variable reference rates and an interest margin. At December 31, 2023, we had no amounts outstanding under our revolving credit facilities. Future U.S. dollar borrowings under the revolving credit commitment will bear interest at SOFR plus 1.60%. Our convertible debt instruments bear interest at a fixed rate, and accordingly are not subject to interest rate fluctuation risks. At December 31, 2023, we had $972.7 million of cash and cash equivalents and $35.8 million of short-term investments, which earn interest at various variable rates. Based on the debt and cash positions at December 31, 2023, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by approximately $3.6 million. See Note 6 to our consolidated financial statements for additional information about our long-term debt. Foreign Exchange Risk We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. We have used forward exchange contracts to economically hedge a portion of these exposures in the past. We had no outstanding forward contracts as of December 31, 2023. We do not utilize derivatives or other financial instruments for trading or other speculative purposes. Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locations in Asia in local currencies. Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local currencies. Our exposure to foreign currency risk is mitigated to the extent that the costs incurred and the revenues earned in a particular currency offset one another. Our exposure to foreign currency risk is more pronounced in Israel, the Czech Republic, and China because the percentage of expenses denominated in Israeli shekels, Czech koruna, and Chinese renminbi to total expenses is much greater than the percentage of sales denominated in Israeli shekels, Czech koruna, and Chinese renminbi to total sales. Therefore, if the Israeli shekel, Czech koruna, and Chinese renminbi strengthen against all or most of our other major currencies, our operating profit is reduced. Where possible, we maintain local currency denominated cash balances in these countries approximately equal to the local currency liabilities to naturally hedge our exposures. We also have a slightly higher percentage of euro-denominated sales than expenses. Therefore, when the euro strengthens against all or most of our other major currencies, our operating profit is slightly increased. Accordingly, we monitor several important cross-rates. Upon completion of the acquisition of Nexperia's Newport wafer fab, we anticipate greater exposure to British sterling, where costs incurred in British sterling are expected to exceed sales denominated in British sterling. The acquisition price for Nexperia's Newport wafer fab is denominated in U.S. dollars. 58 We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2023, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant. The foreign currency exchange rates we used were based on market rates in effect at December 31, 2023. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $15.3 million at December 31, 2023, although individual line items in our consolidated statement of operations would be materially affected. For example, a 10% weakening in all foreign currencies would decrease the U.S. dollar equivalent of operating income generated in foreign currencies, which would be offset by foreign exchange gains of our foreign subsidiaries that have significant transactions in U.S. dollars or have the U.S. dollar as their functional currency. A change in the mix of the currencies in which we transact our business could have a material effect on the estimated impact of the hypothetical 10% movement in the value of the U.S. dollar. Furthermore, the timing of cash receipts and disbursements could result in materially different actual results versus the hypothetical 10% movement in the value of the U.S. dollar, particularly if there are significant changes in exchange rates in a short period of time. Commodity Price Risk Although most materials incorporated in our products are available from a number of sources, certain materials are available only from a relatively limited number of suppliers or are subject to significant price volatility. Our results of operations may be materially and adversely affected if we have difficulty obtaining these raw materials, the quality of available raw materials deteriorates, or there are significant price changes for these raw materials. The determination that any of the raw materials used in our products are conflict minerals originating from the Democratic Republic of the Congo and adjoining countries could increase the probability that we will encounter the challenges noted above, incur additional expenses to comply with government regulations, and face public scrutiny. For periods in which the prices of these raw materials are rising, we may be unable to pass on the increased cost to our customers which would result in decreased margins for the products in which they are used. For periods in which the prices are declining, we may be required to write down our inventory carrying cost of these raw materials, since we record our inventory at the lower of cost or market. Depending on the extent of the difference between market price and our carrying cost, this write-down could have a material adverse effect on our net earnings. We also may need to record losses for adverse purchase commitments for these materials in periods of declining prices. Silicon wafers are the most important raw material for the manufacturing of our semiconductor products. Silicon wafers are manufactured from high-purity silicon, a metalloid. There have at times been industry-wide shortages of high-purity silicon resulting primarily from growing demand of the electronic component and solar power industries, and limited growth in high-purity silicon manufacturing capacities. Shifts in demand for high-purity silicon and in turn, silicon wafers, have resulted in significant fluctuation in prices of silicon wafers. We are a major consumer of the world’s annual production of tantalum, a metal used in the manufacturing of tantalum capacitors. There are few suppliers that process tantalum ore into capacitor grade tantalum powder. Palladium, a metal used to produce multi-layer ceramic capacitors, is currently found primarily in South Africa and Russia. Palladium is a commodity metal that is subject to price volatility. Certain other metals used in the manufacture of our products, such as copper, are traded on active markets, and can also be subject to significant price volatility. We periodically enter into short-term commitments to purchase palladium and defined portions of annual consumption of other metals if market prices decline below budget. In certain circumstances, we also purchase precious metals bullion in excess of our immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations. We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $8.5 million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals at fixed prices. 59 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this Item are filed herewith, commencing on page F-1 of this report. Item 9. None. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Item 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Certifications The certifications of our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K. We have also filed with the New York Stock Exchange the most recent Annual Certification as required by Section 303A.12(a) of the New York Stock Exchange Listed Company Manual. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the 2013 framework set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. Ernst & Young LLP has issued an attestation report on the effectiveness of our internal control over financial reporting. Their report is set forth below. 60 To the Stockholders and the Board of Directors of Vishay Intertechnology, Inc. Report of Independent Registered Public Accounting Firm Opinion on Internal Control over Financial Reporting We have audited Vishay Intertechnology, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Vishay Intertechnology, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 16, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Philadelphia, Pennsylvania February 16, 2024 61 Item 9B. OTHER INFORMATION None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fiscal quarter ended December 31, 2023. Item 9C. None. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE We have a code of ethics applicable to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer or Controller, and financial managers. The text of this code has been posted on our website. To view the code, go to our website at ir.vishay.com and click on Corporate Governance. You can obtain a printed copy of this code, free of charge, by contacting us at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 It is our intention to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or any waiver from, a provision of this code by posting such information on our website, at the aforementioned address and location. Certain information required under this Item with respect to our Executive Officers is set forth in Part I hereof under the caption “Executive Officers of the Registrant.” Other information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 11. EXECUTIVE COMPENSATION Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 12. STOCKHOLDER MATTERS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. 62  Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES PART IV (a) Documents Filed as Part of Form 10-K 1. Financial Statements The Consolidated Financial Statements for the year ended December 31, 2023 are filed herewith. See Index to the Consolidated Financial Statements on page F-1 of this report. 2. Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable, not material, or the required information is shown in the consolidated financial statements or the notes thereto. 3. Exhibits 3.1 3.2 3.3 3.4 4.1 4.2 4.3 4.4 4.5 4.6 10.1† 10.2† 10.3† 10.4† 10.5† 10.6† 10.7† 10.8† 10.9† Corrected Amended and Restated Certificate of Incorporation of Vishay Intertechnology, Inc. dated June 5, 2012. Incorporated by reference to Exhibit 3.1 to our current report on Form 8-K filed June 5, 2012. Amended and Restated Bylaws dated June 1, 2011. Incorporated by reference to Exhibit 3.2 to our current report on Form 8-K filed June 2, 2011. First Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on August 11, 2015. Second Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on February 21, 2023. Indenture, dated as of June 12, 2018, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed June 13, 2018. Form of Global Note, representing Vishay Intertechnology, Inc.'s 2.25% Senior Convertible Notes due 2025 (included as Exhibit A to the Indenture filed as Exhibit 4.5). Incorporated by reference to Exhibit 4.2 to our current report on Form 8-K, filed on June 13, 2018. Description of Capital Stock. Incorporated by reference to Exhibit 4.1 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. First Supplemental Indenture, dated as of December 23, 2020, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed January 5, 2021. Indenture, dated as of September 12, 2023, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 in our current report on Form 8-K filed September 12, 2023. Form of Global Note, representing Vishay Intertechnology, Inc.'s 2.25% Senior Convertible Notes due 2030 (included as Exhibit A to the Indenture filed as Exhibit 4.1). Incorporated by reference to Exhibit 4.2 in our current report on Form 8-K filed September 12, 2023. Amended and restated Vishay Intertechnology 162(m) Cash Bonus Plan. Incorporated by reference to Annex A to our Proxy Statement, dated March 31, 2017, for our 2017 Annual Meeting of Stockholders. Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program. Incorporated by reference to Annex A to our definitive proxy statement, dated April 4, 2014, for our 2014 Annual Meeting of Stockholders. Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program (Including Restated Annex A – Israel). Incorporated by reference to Exhibit 10.3 to our annual report on Form 10-K for the year ended December 31, 2022. Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan. Incorporated by reference to Annex A to our definitive proxy statement, dated April 4, 2023, for our 2023 Annual Meeting of Stockholders. Employment agreement, dated January 1, 2004, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended October 2, 2004. Amendment to Employment Agreement, dated August 8, 2010, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.5 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2010. Amendment to Employment Agreement, dated August 28, 2011, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2011. Amendment to Employment Agreement, dated July 1, 2021, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2021. Employment Agreement, dated January 1, 2004, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended October 2, 2004. 63 10.10† 10.11† 10.12† 10.13† 10.14† 10.15† 10.16† 10.17† 10.18† 10.19† 10.20† 10.21† 10.22† 10.23† 10.24† 10.25† 10.26† 10.27† 10.28† 10.29† 10.30† 10.31† 10.32† Amendment to Employment Agreement, dated August 8, 2010, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.6 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2010. Amendment to Employment Agreement, dated August 30, 2011, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2011. Amendment to Employment Agreement, dated February 23, 2021, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Amendment to Employment Agreement, dated July 14, 2022, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed July 18, 2022. Employment Agreement, dated February 15, 2018, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.5 to our current report on Form 8-K, filed on February 16, 2018. Amendment to Employment Agreement between Vishay Dale Electronics, LLC (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal dated May 20, 2020. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended July 4, 2020. Second Amendment to Employment Agreement, dated February 23, 2021, between Vishay Dale Electronics, LLC (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.6 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Dale Electronics LLC (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K, filed July 18, 2022. Employment Agreement, dated February 15, 2018, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed on February 16, 2018. First Amendment to Employment Agreement, dated February 28, 2020, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed February 28, 2020. Second Amendment to Employment Agreement, dated February 23, 2021, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Third Amendment to Employment Agreement, dated July 14, 2022, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.3 to our current report on Form 8-K, filed July 18, 2022. Terms and Conditions of Johan Vandoorn Employment Agreement, dated January 16, 2012. Incorporated by reference to Exhibit 10.31 to our 2011 annual report on Form 10-K. Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March 4, 2014. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended March 29, 2014. Second Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March 3, 2015. Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscal quarter ended April 4, 2015. Third Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated February 15, 2018. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K, filed on February 16, 2018. Fourth Amendment to the Terms and Conditions of Johan Vandoorn Employment Agreement, dated February 23, 2021. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Transition Agreement, dated July 15, 2022, between Vishay Capacitors Belgium NV (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Johan Vandoorn. Incorporated by reference to Exhibit 10.8 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. Employment Agreement, dated February 15, 2018, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.3 to our current report on Form 8-K, filed on February 16, 2018. First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Transition Agreement, dated July 15, 2022, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.9 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. Employment Agreement, dated February 15, 2018, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.4 to our current report on Form 8-K, filed on February 16, 2018. First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.5 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 64 10.33† 10.34† 10.35† 10.36† 10.37† 10.38† 10.39† 10.40† 10.41† 10.42† 10.43 10.44 10.45 10.46 10.47* 10.48* 10.49* 10.50* 10.51* 10.52 10.53* 10.54* 10.55 10.56 10.57 Transition Agreement, dated July 15, 2022, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.10 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. Employment Agreement between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeffrey Webster dated May 20, 2020. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended July 4, 2020. First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeffrey Webster. Incorporated by reference to Exhibit 10.7 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeff Webster. Incorporated by reference to Exhibit 10.4 to our current report on Form 8-K, filed July 18, 2022. Employment Agreement, dated July 14, 2022, between Siliconix incorporated (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc. and Roy Shoshani. Incorporated by reference to Exhibit 10.5 to our current report on Form 8-K, filed July 18, 2022. Employment Agreement between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock dated May 20, 2020. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended July 4, 2020. First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock. Incorporated by reference to Exhibit 10.8 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. Second Amendment to Employment Agreement, dated July 14, 2022, between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock. Incorporated by reference to Exhibit 10.6 to our current report on Form 8-K, filed July 18, 2022. Second Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Intertechnology, Inc. and Peter Henrici. Incorporated by reference to Exhibit 10.7 to our current report on Form 8-K, filed July 18, 2022. Vishay Intertechnology, Inc. Key Employee Wealth Accumulation Plan (as amended and restated, effective January 1, 2017). Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 23, 2016. Master Separation and Distribution Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. and Vishay Precision Group, Inc. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed June 23, 2010. Employee Matters Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. and Vishay Precision Group, Inc. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed June 23, 2010. Tax Matters Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Intertechnology, Inc. Incorporated by reference to Exhibit 10.1 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Trademark License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Intertechnology, Inc. Incorporated by reference to Exhibit 10.2 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Supply Agreement, dated July 6, 2010, between Vishay Advanced Technology, Ltd. And Vishay Dale Electronics, Inc. Incorporated by reference to Exhibit 10.4 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Patent License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Dale Electronics, Inc. Incorporated by reference to Exhibit 10.6 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Supply Agreement, dated July 6, 2010, between Vishay Dale Electronics, Inc. and Vishay Advanced Technology, Ltd. Incorporated by reference to Exhibit 10.8 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Supply Agreement, dated July 6, 2010, between Vishay Measurements Group, Inc. and Vishay S.A. Incorporated by reference to Exhibit 10.9 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Manufacturing Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Precision Foil GmbH. Incorporated by reference to Exhibit 10.10 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Precision Foil GmbH. Incorporated by reference to Exhibit 10.11 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Supply Agreement, dated July 6, 2010, between Vishay Precision Foil GmbH and Vishay S.A. Incorporated by reference to Exhibit 10.12 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Measurements Group, Inc. Incorporated by reference to Exhibit 10.13 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. Credit Agreement, dated as of June 5, 2019, among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative agent and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed June 5, 2019. Amendment No. 1 to Credit Agreement, dated as of September 20, 2019, among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative agent and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended September 28, 2019. Amendment and Restatement Agreement, dated as of May 8, 2023 among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed May 8, 2023. 65 10.58† 10.59† 10.60† 10.61† 10.62† 10.63 10.64 10.66†** 10.67†** 21** 23.1** 31.1** 31.2** 32.1** 32.2** 97.1** 101** Vishay Intertechnology, Inc. Form of Executive Officer Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 10.1 in our quarterly report on Form 10-Q for the fiscal quarter ended April 1, 2023. Vishay Intertechnology, Inc. Form of Non-Employee Director Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 10.48 to our 2019 annual report on Form 10-K. Vishay Intertechnology, Inc. Form of Executive Officer Phantom Stock Unit Agreement. Incorporated by reference to Exhibit 10.50 to our 2019 annual report on Form 10-K. Vishay Intertechnology, Inc. Non-Employee Director Compensation Plan. Incorporated by reference to Exhibit 10.44 to our 2020 annual report on Form 10-K. Form of Future Deferred Remuneration Arrangement of Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.). Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 28, 2021. Form of Base Capped Call Confirmation. Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K filed September 12, 2023. Form of Additional Capped Call Confirmation. Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K filed September 12, 2023. Form of Phantom Stock Award Agreement. Form of Non-Employee Director RSU Agreement. Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm. Certification pursuant to Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer. Certification pursuant to Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer. Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer. Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer. Vishay Intertechnology, Inc. Dodd-Frank Clawback Policy Interactive Data File (Annual Report on Form 10-K, for the year ended December 31, 2023, furnished in iXBRL (Inline eXtensible Business Reporting Language)). Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language and contained in Exhibit 101) 104** __________________ * Confidential treatment has been requested by, and accorded to, VPG with respect to certain portions of this Exhibit. Omitted portions have been filed separately by VPG with the Securities and Exchange Commission. ** Filed herewith. † Denotes a management contract or compensatory plan, contract, or arrangement. Item 16. FORM 10-K SUMMARY Not applicable. 66 Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES VISHAY INTERTECHNOLOGY, INC. By:/s/ Joel Smejkal Joel Smejkal President and Chief Executive Officer February 16, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated below. Signature Principal Executive Officer: /s/ Joel Smejkal Joel Smejkal Principal Financial and Accounting Officer: Title Date President, Chief Executive Officer, and Director February 16, 2024 /s/ Lori Lipcaman Lori Lipcaman Board of Directors: /s/ Marc Zandman Marc Zandman /s/ Renee B. Booth Dr. Renee B. Booth /s/ Michael J. Cody Michael J. Cody /s/ Michiko Kurahashi Dr. Michiko Kurahashi /s/ Abraham Ludomirski Dr. Abraham Ludomirski /s/ John Malvisi John Malvisi /s/ Ziv Shoshani Ziv Shoshani /s/ Timothy V. Talbert Timothy V. Talbert /s/ Jeffrey H. Vanneste Jeffrey H. Vanneste /s/ Ruta Zandman Ruta Zandman /s/ Raanan Zilberman Raanan Zilberman Executive Vice President and Chief Financial Officer February 16, 2024 Executive Chairman of the Board of Directors Director Director Director Director Director Director Director Director Director Director February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 February 16, 2024 67 This page intentionally left blank. 68 Vishay Intertechnology, Inc. Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID:42) Audited Consolidated Financial Statements Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Cash Flows Consolidated Statements of Stockholders’ Equity Notes to the Consolidated Financial Statements F-2 F-4 F-6 F-7 F-8 F-9 F-10 F-1 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Vishay Intertechnology, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vishay Intertechnology, Inc. (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. F-2 Description of Matter the Sales Returns and Allowances Accruals At December 31, 2023, the Company’s liability for sales returns and allowances was $47.8 million. As discussed in Note 1 of the consolidated financial statements, the Company recognizes the estimated variable consideration to be received as revenue from contracts with customers and recognizes a related accrued liability for estimated future credits that will be issued to its customers, primarily distributors, for product returns, scrap allowance, “stock, ship and debit”, and price protection programs with those customers. Auditing management’s sales returns and allowances accruals specifically related to the scrap allowance and “stock, ship and debit” programs was especially challenging because of the judgement used by management to determine the amount of future credits that will be issued to customers for sales that were recognized during the period. Estimating the scrap allowance and "stock, ship and debit" accrual involves the application of models which require management to make certain assumptions including historical customer credit rates. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s sales returns and allowances review process for the scrap allowance and “stock, ship and debit” programs, including testing controls over management’s review of the reserve calculation and the underlying assumptions used to develop the estimates. To test the estimated sales returns and allowances accruals for the scrap allowance and “stock, ship and debit” programs, we performed audit procedures that included, among others, assessing methodologies and testing the assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analyses. We inspected contracts with customers in evaluating whether the assumptions used by management agreed with the terms and conditions of the contracts. In addition, we compared the assumptions used by management to actual historical credit experience. We also assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the accruals that would result from changes in the assumptions. /s/ Ernst & Young LLP We have served as the Company's auditor since 1968. Philadelphia, Pennsylvania February 16, 2024 F-3 VISHAY INTERTECHNOLOGY, INC. Consolidated Balance Sheets (In thousands, except share amounts) Assets Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net of allowances for credit losses of $1,705 and $1,324, respectively Inventories: Finished goods Work in process Raw materials Total inventories Prepaid expenses and other current assets Total current assets Property and equipment, at cost: Land Buildings and improvements Machinery and equipment Construction in progress Allowance for depreciation Property and equipment, net Right of use assets Deferred income taxes Goodwill Other intangible assets, net Other assets Total assets Continues on following page. December 31, 2023 December 31, 2022 $ 972,719 $ 610,825 35,808 305,272 426,674 416,178 167,083 267,339 213,098 647,520 156,234 261,345 201,300 618,879 214,443 2,297,164 170,056 2,121,210 77,006 719,387 3,053,868 290,593 (2,846,208) 1,294,646 75,907 658,829 2,857,636 243,038 (2,704,951) 1,130,459 126,829 137,394 201,416 131,193 104,667 201,432 72,333 77,896 110,141 4,239,923 $ 98,796 3,865,653 $ F-4 VISHAY INTERTECHNOLOGY, INC. Consolidated Balance Sheets (continued) (In thousands, except share amounts) Liabilities and equity Current liabilities: Trade accounts payable Payroll and related expenses Lease liabilities Other accrued expenses Income taxes Total current liabilities Long-term debt, less current portion U.S. transition tax payable Deferred income taxes Long-term lease liabilities Other liabilities Accrued pension and other postretirement costs Total liabilities Commitments and contingencies Stockholders' equity: Preferred stock, par value $1.00 per share: authorized - 1,000,000 shares; zero issued Common stock, par value $0.10 per share: authorized - 300,000,000 shares; 133,187,901 and 132,911,771 shares outstanding Class B convertible common stock, par value $0.10 per share: authorized - 40,000,000 shares; 12,097,148 shares outstanding Capital in excess of par value Retained earnings Treasury stock (at cost): 7,535,881 and 4,240,573 common shares Accumulated other comprehensive income (loss) Total Vishay stockholders' equity Noncontrolling interests Total equity Total liabilities and equity See accompanying notes. December 31, 2023 December 31, 2022 $ $ $ 191,002 161,940 26,485 239,350 73,098 691,875 818,188 47,027 95,776 102,830 87,918 195,503 2,039,117 189,099 166,079 25,319 261,606 84,155 726,258 500,937 83,010 117,183 108,493 92,530 187,092 1,815,503 - - 13,319 13,291 1,210 1,291,499 1,041,372 (161,656) 10,337 2,196,081 4,725 2,200,806 4,239,923 $ 1,210 1,352,321 773,228 (82,972) (10,827) 2,046,251 3,899 2,050,150 3,865,653 F-5 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Operations (In thousands, except per share amounts) Net revenues Costs of products sold Gross profit Selling, general, and administrative expenses Operating income Other income (expense): Interest expense Other Loss on early extinguishment of debt Total other income (expense) Income before taxes Income tax expense Net earnings Less: net earnings attributable to noncontrolling interests Net earnings attributable to Vishay stockholders Basic earnings per share attributable to Vishay stockholders: Diluted earnings per share attributable to Vishay stockholders: Weighted average shares outstanding - basic Weighted average shares outstanding - diluted Cash dividends per share See accompanying notes. Years ended December 31, 2022 2023 2021 $ $ 3,402,045 2,427,552 974,493 $ 3,497,401 2,438,412 1,058,989 3,240,487 2,352,574 887,913 488,349 486,144 443,503 615,486 420,111 467,802 (25,131) 25,263 (18,874) (18,742) 467,402 141,889 (17,129) (4,852) - (21,981) 593,505 163,022 (17,538) (15,654) - (33,192) 434,610 135,673 325,513 430,483 298,937 1,693 1,673 967 323,820 $ 428,810 $ 297,970 2.32 $ 2.99 $ 2.31 $ 2.98 $ 139,447 140,246 143,399 143,915 2.05 2.05 145,005 145,495 $ $ $ $ 0.400 $ 0.400 $ 0.385 F-6 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Comprehensive Income (In thousands) Net earnings Other comprehensive income (loss), net of tax Pension and other post-retirement actuarial items Foreign currency translation adjustment Other comprehensive income (loss) Comprehensive income Years ended December 31, 2022 2023 2021 $ 325,513 $ 430,483 $ 298,937 (7,001) 51,310 18,167 28,165 21,164 (41,885) (51,978) 9,425 (33,811) 346,677 439,908 265,126 Less: comprehensive income attributable to noncontrolling interests 1,693 1,673 967 Comprehensive income attributable to Vishay stockholders $ 344,984 $ 438,235 $ 264,159 See accompanying notes. F-7 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Cash Flows (In thousands) Operating activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Gain on disposal of property and equipment Inventory write-offs for obsolescence Pensions and other postretirement benefits, net of contributions Stock compensation expense Loss on early extinguishment of debt Deferred income taxes Other operating activities Change in U.S. transition tax liability Change in repatriation tax liability Net change in operating assets and liabilities, net of effects of businesses acquired Net cash provided by operating activities Investing activities Capital expenditures Proceeds from sale of property and equipment Purchase of and deposits for businesses, net of cash acquired Purchase of short-term investments Maturity of short-term investments Other investing activities Net cash used in investing activities Financing activities Proceeds from long-term borrowings Repurchase of convertible debt instruments Net proceeds (payments) on revolving credit facility Debt issuance costs Cash paid for capped call Dividends paid to common stockholders Dividends paid to Class B common stockholders Repurchase of common stock held in treasury Distributions to noncontrolling interests Cash withholding taxes paid when shares withheld for vested equity awards Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Years ended December 31, 2022 2023 2021 $ 325,513 $ 430,483 $ 298,937 184,373 (554) 37,426 (9,559) 16,532 18,874 36,783 9,442 (27,670) (63,600) (161,857) 365,703 (329,410) 1,156 (13,753) (117,523) 387,898 (1,219) (72,851) 750,000 (386,745) (42,000) (26,823) (94,200) (50,787) (4,839) (78,684) (867) (3,994) 61,061 7,981 163,991 (455) 26,898 (615) 6,545 - 38,677 835 (14,757) (25,201) (142,113) 484,288 (325,308) 1,198 (50,000) (285,956) 132,901 (1,766) (528,931) - - 42,000 - - (52,348) (4,839) (82,972) (741) (2,123) (101,023) (17,617) 167,037 (303) 20,657 2,106 6,605 - 50,613 9,621 (14,757) - (83,412) 457,104 (218,372) 1,317 (20,847) (140,603) 147,893 129 (230,483) - (300) - - - (51,094) (4,657) - (800) (1,963) (58,814) (13,573) Net increase (decrease) in cash and cash equivalents 361,894 (163,283) 154,234 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year See accompanying notes 610,825 972,719 $ 774,108 610,825 $ 619,874 774,108 $ F-8 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Stockholders' Equity (In thousands, except share amounts) Class B Convertible Common Stock Capital in Excess of Par Value Common Stock Retained Earnings (Accumulated Deficit) Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Vishay Stockholders' Equity Noncontrolling Interests Total Equity $ 13,256 $ 1,210 $ 1,409,200 $ 138,990 $ $ 13,559 $ 1,576,215 $ 2,800 $ 1,579,015 Balance at December 31, 2020 Cumulative effect of accounting change for adoption of ASU 2020-06 Net earnings Other comprehensive income (loss) Distributions to noncontrolling interests Issuance of stock and related tax withholdings for vested restricted stock units (149,722 shares) Dividends declared ($0.385 per share) Stock compensation expense Balance at December 31, 2021 Net earnings Other comprehensive income Distributions to noncontrolling interests Issuance of stock and related tax withholdings for vested restricted stock units (201,039 shares) Dividends declared ($0.400 per share) Stock compensation expense Repurchase of common stock held in treasury (4,240,573 shares) Balance at December 31, 2022 Net earnings Other comprehensive income Distributions to noncontrolling interests Issuance of stock and related tax withholdings for vested restricted stock units (276,130 shares) Dividends declared ($0.400 per share) Stock compensation expense Repurchase of common stock held in treasury (3,295,308 shares) Capped call transactions, net of tax Balance at December 31, 2023 See accompanying notes. $ $ - - - - (66,078) - - - 20,566 297,970 - - - - - - 15 - - 13,271 - - - 20 - - $ - - - 1,210 - - - (1,978) 81 6,605 $ 1,347,830 - - - $ - - - (2,143) 89 6,545 - - - - - - - - - - - - - - - - - (33,811) - - - - $ (20,252) $ - 9,425 - - - - (45,512) 297,970 (33,811) - (1,963) (55,751) 6,605 1,743,753 428,810 9,425 - $ (2,123) (57,187) 6,545 $ - 13,291 - - - - 1,210 - - - - $ 1,352,321 - - - $ $ (82,972) (82,972) - - - - (10,827) $ - 21,164 - $ (82,972) 2,046,251 323,820 21,164 - - 967 - (800) (45,512) 298,937 (33,811) (800) - - - 2,967 1,673 - (741) (1,963) (55,751) 6,605 $ 1,746,720 430,483 9,425 (741) - - - (2,123) (57,187) 6,545 - 3,899 1,693 - (867) (82,972) $ 2,050,150 325,513 21,164 (867) 28 - - - - - - - 13,319 $ - - 1,210 $ (4,022) 50 16,532 - (73,382) $ 1,291,499 $ 1,041,372 $ - - - - - - (3,994) (55,626) 16,532 - - - (3,994) (55,626) 16,532 (78,684) - (161,656) $ - - 10,337 $ (78,684) (73,382) 2,196,081 $ - - 4,725 (78,684) (73,382) $ 2,200,806 - (55,832) $ - 401,694 428,810 - - - (57,276) - $ - 773,228 323,820 - - - (55,676) - - - F-9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Vishay Intertechnology, Inc. (“Vishay” or the “Company”) manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that are essential to innovative designs in the automotive, industrial, military, aerospace, medical, power supplies, telecommunications, consumer products, and computing end markets. Semiconductors include MOSFETs, diodes, and optoelectronic components. Passive components include resistors, inductors, and capacitors. Note 1 – Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of Vishay and all of its subsidiaries in which a controlling financial interest is maintained. For those consolidated subsidiaries in which the Company’s ownership is less than 100 percent, the outside stockholders’ interests are shown as noncontrolling interests in the accompanying consolidated balance sheets. Investments in affiliates over which the Company has significant influence but not a controlling interest are carried on the equity basis. Investments in affiliates over which the Company does not have significant influence are accounted for by the cost method. All intercompany transactions, accounts, and profits are eliminated. Revenue Recognition The Company recognizes revenue from contracts with customers when it satisfies the performance obligations within the contract. The Company has framework agreements with many of its customers that contain the terms and conditions of future sales, but do not create enforceable rights or obligations. For revenue recognition purposes, the Company considers the combined purchase orders and the terms and conditions contained within such framework agreements to be contracts. Payment terms for the Company's sales are generally less than sixty days. Substantially all of the Company's receivables historically have been and are expected to continue to be collected within twelve months of the transfer of products to the customer and the Company expects this to continue going forward. Accordingly, the Company does not recognize a financing component of the transaction price. Revenue is measured based on the consideration specified in contracts with customers, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies its performance obligations. The Company analyzes its contracts to determine whether the promise in the contract to construct and transfer goods to the customer is a performance obligation that will be satisfied over time or at a point in time. When the Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, the Company transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time. The Company has a limited number of contracts for custom products that meet the criteria to recognize revenue over time. The Company's contracts contain two performance obligations: delivery of products and warranty protection. The Company does not sell separate, enhanced, or extended warranty coverage, but through its customary business practices, the Company has created implied service-type warranties, which are accounted for as separate performance obligations. Revenue is allocated between these two performance obligations and recognized as the obligations are satisfied. The allocation of revenue to warranty protection is based on an estimate of expected cost plus margin. The delivery of products performance obligation is satisfied and product sales revenue is recognized when the customer takes control of the products. Warranty revenue is deferred and the warranty protection performance obligation is satisfied and revenue is recognized over the warranty period, which is typically less than twenty four months from sale to end customer. The warranty deferred revenue liability is recorded within Other Accrued Expenses and Other Liabilities on the accompanying consolidated balance sheets. The deferred revenue balance associated with the service-type warranty performance obligations and the components that comprise the change in the deferred revenue balance are not significant. The Company has a broad line of products that it sells to original equipment manufacturers ("OEMs"), electronic manufacturing services ("EMS") companies, which manufacture for OEMs on an outsourcing basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS companies. F-10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) The Company recognizes revenue on sales to distributors when the distributor takes control of the products ("sold-to" model). The Company has agreements with distributors that allow distributors a limited credit for unsaleable products, which it terms a "scrap allowance." Consistent with industry practice, the Company also has a "stock, ship and debit" program whereby it considers requests by distributors for credits on previously purchased products that remain in distributors' inventory, to enable the distributors to offer more competitive pricing. In addition, the Company has contractual arrangements whereby it provides distributors with protection against price reductions initiated by the Company after product is sold by the Company to the distributor and prior to resale by the distributor. The Company recognizes the estimated variable consideration to be received as revenue and records a related accrued expense for the consideration not expected to be received, based upon its estimate of product returns, scrap allowances, "stock, ship and debit" credits, and price protection credits that will be attributable to sales recorded through the end of the period. The Company makes these estimates based upon sales levels to its distributors during the period, inventory levels at the distributors, current and projected market conditions, and historical experience under the programs. The Company utilizes a number of different methodologies and considers several factors when estimating the accruals. Some of the factors considered include sales levels to distributors during the relevant period, inventory levels at the distributors, current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits. These procedures require the exercise of significant judgments. The Company believes that it has a reasonable basis to estimate future credits under the programs. See sales returns and allowances accrual activity in Note 9. The Company pays commissions to external sales representatives on a per-sale basis. Accordingly, these commissions are expensed as incurred because the future amortization period of the asset that the Company otherwise would have recognized is one year or less. Internal staff are not paid commissions. The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the product even if the shipping and handling activities are performed after the customer obtains control. The Company does not evaluate whether shipping and handling activities are promised services to its customers. If control transfers and revenue is recognized for the related products before the shipping and handling activities occur, the related costs of those shipping and handling activities is accrued. The Company applies this accounting policy election consistently to similar types of transactions. See disaggregated revenue information in Note 15. Research and Development Expenses Research and development costs are expensed as incurred. The amount charged to expense for research and development (exclusive of purchased in-process research and development) aggregated $99,506, $81,182, and $77,377, for the years ended December 31, 2023, 2022, and 2021, respectively. The Company spends additional amounts for the development of machinery and equipment for new processes and for cost reduction measures. Income Taxes The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances have been established for deferred tax assets which the Company believes do not meet GAAP criteria of “more likely than not” to be realized. This criterion requires a level of judgment regarding future taxable income, which may be revised due to changes in market conditions, tax laws, or other factors. If the Company’s assumptions and estimates change in the future, valuation allowances established may be increased, resulting in increased tax expense. Conversely, if the Company is ultimately able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been established, then the related portion of the valuation allowance can be released, resulting in decreased tax expense. The Company and its subsidiaries are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances and the provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. These accruals for tax-related uncertainties are based on management’s best estimate of potential tax exposures. When particular matters arise, a number of years may elapse before such matters are audited by tax authorities and finally resolved. Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution. Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution. The amount included in current liabilities on the accompanying consolidated balance sheets reflect only amounts expected to be settled in cash within one year. See Note 5. F-11 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) Cash, Cash Equivalents, and Short-Term Investments Cash and cash equivalents includes demand deposits and highly liquid investments with maturities of three months or less when purchased. Highly liquid investments with original maturities greater than three months, but less than one year are classified as short-term investments. At December 31, 2023 and 2022, the Company’s short-term investments were comprised of time deposits with financial institutions whose original maturity exceeds three months, but less than one year. Allowance for Credit Losses The Company estimates its credit losses on financial instruments using a current expected credit loss model. The Company maintains an allowance for accounts receivable credit losses resulting from the inability of its customers to make required payments. Payment terms for the Company's sales are generally less than ninety days. Substantially all of the Company's trade receivables are collected within twelve months of the transfer of products to the customer and the Company expects this to continue going forward. The credit loss allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends and an evaluation of the impact of current and projected economic conditions. Receivables from customers with deteriorating financial condition and those over 180 days past due are removed from the pool and evaluated separately. Net credit loss expense for accounts receivable was $369, $365, and $384 for the years ended December 31, 2023, 2022, and 2021, respectively. The Company’s cash equivalents, short-term investments, and restricted investments are accounted for as held-to-maturity debt instruments, at amortized cost. Interest income on these instruments is recorded as "Other income" on the consolidated statements of operations and interest receivable is recognized as a separate asset and recorded in "Prepaid expenses and other current assets" on the consolidated balance sheets. The Company has not experienced a credit loss on the principal or interest receivable of its cash equivalents, short-term investments, or restricted investments. The Company pools its cash equivalents, short-term investments, and restricted investments by credit rating of the issuing financial institution and estimates an allowance for credit losses based on the corporate bond default ratios, evaluation of the impact of current and projected economic conditions, and probability of credit loss. Net credit loss expense for cash equivalents, short-term investments, and restricted investments was immaterial for the years ended December 31, 2023 and 2022. The Company does not measure an allowance for credit losses on interest receivable. Any uncollectible interest receivable is recognized by reversing interest income within the fiscal quarter that the interest becomes uncollectible. Inventories Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. Inventories are adjusted for estimated obsolescence and written down to net realizable value based upon estimates of future demand, technology developments, and market conditions. Property and Equipment Property and equipment is carried at cost and is depreciated principally by the straight-line method based upon the estimated useful lives of the assets. Machinery and equipment are being depreciated over useful lives of seven years to ten years. Buildings and building improvements are being depreciated over useful lives of twenty years to forty years. Construction in progress is not depreciated until the assets are placed in service. The estimated cost to complete construction in progress at December 31, 2023 was approximately $502,500. Included in the estimated cost to complete the Itzehoe, Germany 12-inch wafer fab construction project are certain costs for which there are currently no contractual commitments to complete. Depreciation expense was $174,457, $155,864, and $159,247 for the years ended December 31, 2023, 2022, and 2021, respectively. Gains and losses on the disposal of assets which do not qualify for presentation as discontinued operations are included in the determination of operating margin (within selling, general, and administrative expenses). Individually material gains and losses on disposal are separately disclosed in the notes to the consolidated financial statements. Commitments and Contingencies The Company has commitments for the purchase of assets to complete its construction in progress as disclosed above. The commitment period for substantially all of these purchase commitments is less than one year. The Company expects to have noncancellable purchase commitments with commitment periods in excess of one year associated with its significant facility expansion programs as the programs progress. As of December 31, 2023, there are no material noncancellable commitments associated with these programs. F-12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) Liabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. The costs for a specific environmental remediation site are discounted if the aggregate amount of the obligation and the amount and timing of the cash payments for that site are fixed or reliably determinable based upon information derived from the remediation plan for that site. Accrued liabilities for environmental matters recorded at December 31, 2023 and 2022 do not include claims against third parties. Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of a business acquired over the fair value of the related net assets at the date of acquisition. Certain intangible assets may be assigned indefinite useful lives. Goodwill and indefinite-lived intangible assets are not amortized but rather are tested for impairment at least annually. These tests are performed more frequently whenever events or changes in circumstances indicate that the assets might be impaired. The Company's business segments (see Note 15) represent its reporting units for goodwill impairment testing purposes. At December 31, 2023 and 2022, respectively, the Company has no recorded indefinite-lived intangible assets. Definite-lived intangible assets are amortized over their estimated useful lives. Patents and acquired technology are being amortized over useful lives of seven years to twenty-five years. Capitalized software is amortized over periods of three years to ten years, primarily included in "Costs of products sold" on the consolidated statements of operations. Customer relationships are amortized over useful lives of five years to twenty years. Noncompete agreements are amortized over periods of three years to ten years. The Company continually evaluates the reasonableness of the useful lives of these assets. GAAP prescribes a quantitative method for determining goodwill impairment. The Company has the option of performing a qualitative assessment before performing the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of the reporting unit is not more likely than not less than the carrying amount, the quantitative impairment test is not required. If it is determined that the fair value of the reporting unit is more likely than not less than the carrying amount, the quantitative impairment test is required. The Company determines the fair value of the reporting unit and compares that fair value to the net book value of the reporting unit. The fair value of the reporting unit is determined using various valuation techniques, including a comparable companies market multiple approach and a discounted cash flow analysis (an income approach). If the net book value of the reporting unit were to exceed the fair value, the Company would recognize an impairment charge. Impairment of Long-Lived Assets The carrying value of long-lived assets held-and-used, other than goodwill and indefinite-lived intangible assets, is evaluated when events or changes in circumstances indicate the carrying value may not be recoverable or the useful life has changed. The carrying value of a long-lived asset group is considered impaired when the total projected undiscounted cash flows from such asset group are separately identifiable and are less than the carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset group. Fair market value is determined primarily using present value techniques based on projected cash flows from the asset group. Losses on long-lived assets held-for-sale, other than goodwill and indefinite-lived intangible assets, are determined in a similar manner, except that fair market values are reduced for anticipated disposal costs. Available-for-Sale Securities Short-term investments and other assets reported on the accompanying consolidated balance sheets include time deposits with financial institutions whose original maturity exceeds three months, but less than one year that are classified as held-to-maturity instruments, and investments in marketable securities that are classified as available-for-sale instruments. The available-for-sale instruments include assets that are held in trust related to the Company’s non-qualified pension and deferred compensation plans (see Note 11) and assets that are intended to fund a portion of the Company’s other postretirement benefit obligations outside of the U.S. These assets are reported at fair value, based on quoted market prices as of the end of the reporting period. Unrealized gains and losses are reported as "Other income (expense)" on the consolidated statements of operations. At the time of sale, the assets that are held in trust related to the Company’s non-qualified pension and deferred compensation plans, any gains (losses) calculated by the specific identification method are recognized as a reduction (increase) to benefits expense, within "Selling, general, and administrative expenses" on the consolidated statements of operations. Financial Instruments The Company uses financial instruments in the normal course of its business, including from time to time, derivative financial instruments. Additionally, from time to time, the Company enters into contracts that are not considered derivative financial instruments in their entirety, but that include embedded derivative features. Other financial instruments include cash and cash equivalents, held-to-maturity short-term investments, accounts receivable, and notes payable. The carrying amounts of these financial instruments reported on the accompanying consolidated balance sheets approximate their fair values due to the short-term nature of these assets and liabilities. F-13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) The fair value measurement accounting guidance establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that reflect the Company’s own assumptions. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Stock-Based Compensation Compensation costs related to stock-based payment transactions are recognized in the consolidated financial statements. The amount of compensation cost is measured based on the grant-date fair value of the equity (or liability) instruments issued. The Company determines compensation cost for restricted stock units ("RSUs") and phantom stock units based on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required vesting period for non-participating awards. Compensation cost is recognized over the period that an officer, employee, or non-employee director is required to provide service in exchange for the award. For RSUs with market conditions, the Company estimates the grant date fair value using a Monte Carlo valuation model and recognizes the expense for the awards over the period in which the condition is assessed regardless of whether the market condition is ultimately achieved. For awards subject to graded vesting, the Company recognizes expense over the service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes. Foreign Currency Translation The Company has significant operations outside of the United States. The Company finances its operations in Europe and certain locations in Asia in local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. The Company’s operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities on the accompanying consolidated balance sheets have been translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the consolidated results of operations and are reported as a separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rate for the year. While the translation of revenues and expenses into U.S. dollars does not directly impact the statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the consolidated results of operations. Treasury Stock The Company records treasury stock at cost, inclusive of fees, commissions and other expenses, when outstanding common shares are repurchased. Self-Insurance Programs The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability, property damage, director and officers’ liability, and vehicle liability. As part of its self-insurance program for certain risks, the Company created a wholly-owned captive insurance entity in 2007. At December 31, 2023, the captive insurance entity provides only property and general liability insurance, although it is licensed to also provide directors’ and officers’ insurance. The captive insurance entity had no amounts accrued for outstanding claims at December 31, 2023 and 2022. Certain investments held by the captive insurance entity are restricted primarily for the purpose of potential insurance claims. Such amounts are recorded in other noncurrent assets, and total $10,571 and $9,352 at December 31, 2023 and 2022, respectively, representing required statutory reserves of the captive insurance entity. F-14 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) Leases The Company leases buildings and machinery and equipment used for manufacturing and/or sales and administrative purposes. The Company is also party to various service, warehousing, and other agreements that it evaluates for potential embedded leases. Substantially all of the Company’s leases are structured and classified as operating leases. The Company leases assets in each region in which it operates. The Company’s leases are generally denominated in the currency of the leased assets' location, which may not be the functional currency of the subsidiary lessee. Accordingly, the Company remeasures its lease liability and recognizes a transactional gain/loss for leases denominated in currencies other than the functional currency of the subsidiary lessee. The Company recognizes right of use assets and lease liabilities for leases greater than twelve months in duration based on the contract consideration for lease components through the term of the lease and the applicable discount rate. Leases with a duration less than or equal to twelve months are considered short-term leases. The Company does not recognize right of use assets or lease liabilities for short-term leases and classifies the expense as short-term lease expense. Variable lease payments based on an index or rate are included in the right of use assets and lease liabilities based on the effective rates at lease commencement. Changes in the rates or indices do not impact the right of use asset or lease liability and are recognized as a component of lease expense in the consolidated statements of operations. Variable lease payments not based on an index or rate are not included in the initial right of use asset and lease liability and are recognized when incurred as a component of lease expense in the consolidated statements of operations. The Company has elected to not separate contract consideration for lease and non-lease components for its building leases. In addition to the noncancellable period of a lease, the Company includes periods covered by extension options it is reasonably certain to exercise, termination options that it is reasonably certain not to exercise, and extension and termination options controlled by the lessor in its determination of the lease term. The Company uses the rate implicit in the contract whenever possible when determining the applicable discount rate. When the implicit rate is not used, the Company employs a portfolio approach based on the duration of the lease. The portfolio lease rates are calculated monthly. No individual lease is considered significant and there are no leases that have not yet commenced that are considered significant. See Note 4 for additional information. Restructuring and Severance Costs Restructuring and severance costs reflect charges resulting from cost reduction programs implemented by the Company. Restructuring and severance costs include exit costs, severance benefits pursuant to an on-going arrangement, voluntary termination compensation under a defined program, and any related pension curtailment and settlement charges. The Company recognizes expense for one-time benefits only after management has committed to a plan, the plan is sufficiently detailed to provide the number, classification, and location of employees to be terminated as well as the expected completion date, the plan has been sufficiently communicated to employees such that they are able to determine the type and amount of benefits they will receive if terminated, and it is unlikely that the plan will be significantly changed or withdrawn. If an employee is not required to render service beyond a minimum retention period, the Company recognizes expense once the aforementioned criteria have been met. If an employee is required to render service beyond a minimum retention period, the Company recognizes expense over the period that the employee is required to render future service. The Company recognizes expense for on-going benefit arrangements when the liability is reasonably estimable and considered probable. The Company recognizes expense for voluntary separation / early retirement when the employee delivers an irrevocable voluntary termination notice pursuant to a defined Company program. The Company recognizes other exit costs as incurred. The Company paid cash of $11,474 in the year ended December 31, 2021 due to a restructuring program announced in 2019. The program was substantially completed as of December 31, 2021. Recent Accounting Pronouncements Recent Accounting Guidance Not Yet Adopted In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures. The ASU adds reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, requires additional interim disclosures, and requires other segment-related disclosures. The ASU is effective for the Company for interim and annual periods beginning on or after January 1, 2024, with the ability to early adopt. The Company adopted the ASU effective January 1, 2024. The adoption of the ASU will not impact the Company's reportable segments' results of operations or cash flows, but will increase its segment disclosures. Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. Such reclassifications had no effect on reported net earnings attributable to Vishay stockholders, total assets, stockholders' equity, or the statements of cash flows. F-15 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 2 - Acquisition and Divestiture Activities As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and commercialize. Year ended December 31, 2023 Neptune 6 Limited On November 8, 2023, Vishay and Nexperia BV announced that they have entered into an agreement whereby Vishay will acquire Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $177,000 in cash, subject to customary post-closing adjustments. On November 8, 2023, Vishay remitted $8,750 to an escrow account as a deposit for the acquisition. Such amount is included within "Purchase of and deposits for businesses, net of cash acquired" on the consolidated statement of cash flows. To effect the transaction, Vishay will acquire a 100% interest in the legal entity Neptune 6 Limited, and its wholly-owned operating subsidiary, Nexperia Newport Limited, which owns and operates the Newport facility. The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024. Centerline Technologies, LLC On June 30, 2023, the Company acquired substantially all of the assets of Centerline Technologies, LLC ("Centerline"), a Massachusetts-based, privately held manufacturer of ceramic components used in many custom parts manufactured by certain of Vishay's Resistors businesses, for $5,003. Based on an estimate of fair values, the Company allocated $1,500 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $2,213 related to this acquisition. The acquired business will be vertically integrated into the Company's Resistors segment, and the goodwill related to this acquisition is included in the Resistors reporting unit for goodwill impairment testing. The results and operations of this acquisition have been included in the Resistors segment since June 30, 2023. Year ended December 31, 2022 On October 28, 2022, the Company acquired all of the outstanding equity interests of MaxPower Semiconductor, Inc., ("MaxPower"), a San Jose, California- based fabless power semiconductor provider dedicated to delivering innovative and cost-effective technologies that optimize power management solutions. The acquisition of MaxPower will enhance Vishay's current and future silicon carbide ("SiC") offerings for fast-growing markets such as electric vehicles. The Company paid cash of $50,000, net of cash acquired, at closing. The transaction also included possible contingent payments of up to $57,500, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. The purchase price for U.S. GAAP purposes includes the fair value, as of the acquisition date, of certain future contingent payments to non-employee equity holders of MaxPower. The estimated fair value of this contingent consideration as of the acquisition date was $6,851. The contingent consideration liability is included in other accrued expenses and other liabilities in the accompanying balance sheet and is remeasured each reporting period, with changes reported as "Selling, general, and administrative expenses" on the consolidated statements of operations. A portion of contingent payments to be made to employee equity holders are deemed compensatory in nature. Such payments made to employee equity holders will be recognized as expense in future periods, and thus are not included in the U.S. GAAP purchase price. One of the contingencies was resolved in the fourth quarter of 2023, which resulted in no additional payments to the former employees and stockholders of MaxPower. Significant developments occurred in another of the contingencies in January 2024. The Company's estimate of the maximum possible contingent payments is $17,500. See Note 18 for further discussion on the fair value measurement of the contingent consideration liability. Based on an estimate of their fair values, the Company allocated $18,600 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $34,246 related to this acquisition. The results and operation of this acquisition have been included in the MOSFETs segment since October 28, 2022. The goodwill related to this acquisition is included in the MOSFETs reporting unit for goodwill impairment testing. Year ended December 31, 2021 On December 31, 2021, the Company acquired substantially all of the U.S. assets of Barry Industries, a Massachusetts-based, privately-held manufacturer of resistive components for $20,847. Based on an estimate of their fair values, the Company allocated $9,600 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $7,813 related to this acquisition. The results and operations of this acquisition have been included in the Resistors segment since December 31, 2021. The goodwill related to this acquisition is included in the Resistors reporting unit for goodwill impairment testing. F-16 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 3 – Goodwill and Other Intangible Assets The Company performs its annual goodwill impairment test as of the first day of the fiscal fourth quarter. No impairment was identified as a result of the Company's annual impairment tests for 2023, 2022, and 2021. The changes in the carrying amount of goodwill by segment for the years ended December 31, 2023 and 2022 were as follows: Balance at December 31, 2021 MaxPower acquisition Exchange rate effects Balance at December 31, 2022 Centerline acquisition Purchase price allocation adjustment Exchange rate effects Balance at December 31, 2023 Other intangible assets are as follows: Intangible assets subject to amortization: Patents and acquired technology Capitalized software Customer relationships Tradenames Other Accumulated amortization: Patents and acquired technology Capitalized software Customer relationships Tradenames Other Net intangible assets subject to amortization MOSFETs Optoelectronic Components Resistors Inductors Total $ $ $ - 36,885 - 36,885 - (2,639) - 34,246 $ $ $ 96,849 - - 96,849 - - - 96,849 $ $ $ $ 42,605 - (722) 41,883 2,213 - 410 44,506 $ $ 25,815 - - 25,815 - - - 25,815 $ $ $ 165,269 36,885 (722) 201,432 2,213 (2,639) 410 201,416 December 31, 2023 December 31, 2022 $ $ 26,053 62,360 83,895 22,300 400 195,008 (14,931) (54,203) (38,664) (14,610) (267) (122,675) 72,333 $ $ 26,988 58,735 82,816 22,933 400 191,872 (14,743) (53,348) (33,021) (12,731) (133) (113,976) 77,896 Amortization expense (excluding capitalized software) was $9,916, $8,127, and $7,790, for the years ended December 31, 2023, 2022, and 2021, respectively. Estimated annual amortization expense of intangible assets on the balance sheet at December 31, 2023 for each of the next five years is as follows: 2024 2025 2026 2027 2028 $ 9,832 9,372 8,555 6,734 5,975 F-17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 4 – Leases The net right of use assets and lease liabilities recognized on the consolidated balance sheets for the Company's operating leases as of December 31, 2023 and 2022 are presented below: Right of use assets Operating Leases Buildings and improvements Machinery and equipment Total Current lease liabilities Operating Leases Buildings and improvements Machinery and equipment Total Long-term lease liabilities Operating Leases Buildings and improvements Machinery and equipment Total Total lease liabilities December 31, 2023 December 31, 2022 $ $ $ $ $ $ $ 121,578 $ 5,251 126,829 $ 126,933 4,260 131,193 23,647 $ 2,838 26,485 $ 22,926 2,393 25,319 100,489 $ 2,341 102,830 $ 129,315 $ 106,693 1,800 108,493 133,812 Lease expense is classified in the statements of operations based on asset use. Total lease cost recognized on the consolidated statements of operations is as follows: Lease expense Operating lease expense Short-term lease expense Variable lease expense Total lease expense Years ended December 31, 2022 2023 2021 $ $ 27,909 $ 988 566 29,463 $ 25,606 $ 971 365 26,942 $ 24,853 2,031 359 27,243 The Company paid $28,164, $24,074, and $23,899 for its operating leases during the years ended December 31, 2023, 2022, and 2021, respectively, which are included in operating cash flows on the consolidated statements of cash flows. The weighted-average remaining lease term for the Company's operating leases is 9.4 years and the weighted-average discount rate is 6.3% as of December 31, 2023. The undiscounted future lease payments for the Company's operating lease liabilities are as follows: 2024 2025 2026 2027 2028 Thereafter $ 27,474 24,235 19,692 17,802 15,154 68,809 The undiscounted future lease payments presented in the table above include payments through the term of the lease, which may include periods beyond the noncancellable term. The difference between the total payments above and the lease liability balance is due to the discount rate used to calculate lease liabilities. F-18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes Changes in Tax Laws and Regulations Israel Effective November 15, 2021, Israel enacted changes in its tax laws. As a direct result of this change in tax law, the Company made the determination during the fourth fiscal quarter of 2021 that substantially all unremitted foreign earnings in Israel were no longer indefinitely reinvested. The Company recorded additional tax expense of $53,316 during the fourth fiscal quarter of 2021 to accrue the claw-back tax on applicable earnings and withholding taxes necessary to distribute these approximately $385,000 of accumulated earnings to the United States. The Company repatriated $81,243 to the United States in 2022 pursuant to this repatriation program. The Company paid withholding taxes, foreign taxes, and Israeli clawback taxes of $25,201 due to the repatriation. United States On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted in the United States. Under previous law, companies could indefinitely defer U.S. income taxation on unremitted foreign earnings. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years. Installments of $27,670 were paid in 2023 and $14,757 were paid in each of 2022, 2021, 2020, 2019, and 2018. The Company expects future installment payments as follows: 2024 2025 $ 37,622 47,027 The U.S. Internal Revenue Service continues to issue regulations to address the provisions of the TCJA. During 2021, the Company amended tax returns for 2018 and 2019 and recognized tax benefits of $8,276 as a result of changes in tax regulations, by making an election regarding Global Intangible Low-Taxed Income (“GILTI”). The Company has elected to account for GILTI tax in the period in which it is incurred and, therefore, does not provide any deferred taxes in the consolidated financial statements at December 31, 2023, 2022, or 2021. Change in Indefinite Reversal Assertion The Company made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany are no longer indefinitely reinvested. Additional tax expense was recorded during the fourth fiscal quarter of 2022 to accrue the $59,642 of withholding taxes necessary to distribute these approximately $360,000 of accumulated earnings to the United States. These changes in this indefinite reinvestment assertion provide greater access to the Company's worldwide cash balances to fund its growth plan and its Stockholder Return Policy. While the change in assertion provides access to these balances, these amounts will be repatriated only as needed. The withholding taxes associated with any distribution to the United States is payable upon distribution. During the fourth fiscal quarter of 2023, the Company repatriated $325,000 of accumulated earnings to the United States and paid withholding taxes, in Germany and Israel, of $63,600. At December 31, 2023, approximately $218,000 of German earnings and approximately $380,000 of Israeli earnings are deemed not indefinitely reinvested. The aggregate tax liability recorded for unremitted earnings at December 31, 2023 is approximately $86,000, which includes amounts accrued subsequent to the changes in indefinite reinvestment determinations described above. There are amounts of unremitted foreign earnings in countries other than Israel and Germany, which continue to be reinvested indefinitely, and the Company has made no provision for incremental foreign income taxes and withholding taxes payable to foreign jurisdictions related to these amounts. Determination of the amount of the unrecognized deferred foreign tax liability for these amounts is not practicable because of the complexities associated with its hypothetical calculation. F-19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Income before taxes consists of the following components: Domestic Foreign Significant components of income taxes are as follows: Current: Federal State and local Foreign Deferred: Federal State and local Foreign Total income tax expense Years ended December 31, 2022 2023 2021 $ $ 67,938 399,464 467,402 $ $ 132,426 461,079 593,505 $ $ 62,921 371,689 434,610 Years ended December 31, 2022 2023 2021 $ $ $ 14,594 1,769 152,343 168,706 (4,871) (3,651) (18,295) (26,817) 141,889 $ $ 24,423 3,313 121,810 149,546 (40,136) 532 53,080 13,476 163,022 $ 2,336 466 82,258 85,060 554 383 49,676 50,613 135,673 F-20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: Deferred tax assets: Pension and other retiree obligations Inventories Net operating loss carryforwards Tax credit carryforwards Research and development costs Original issue discount interest Other accruals and reserves Total gross deferred tax assets Less valuation allowance Deferred tax liabilities: Property and equipment Tax deductible goodwill Earnings not indefinitely reinvested Other - net Total gross deferred tax liabilities Net deferred tax assets (liabilities) $ December 31, 2023 2022 $ 29,400 23,836 81,497 54,363 17,829 20,039 25,179 252,143 (99,663) 152,480 (9,429) (7,040) (88,004) (6,389) (110,862) 29,327 21,040 82,498 53,145 7,704 - 29,930 223,644 (101,169) 122,475 (8,307) (6,144) (113,661) (6,879) (134,991) $ 41,618 $ (12,516) The Company makes significant judgments regarding the realizability of its deferred tax assets (principally net operating losses and tax credits). The carrying value of deferred tax assets is based on the Company’s assessment that it is more likely than not that the Company will realize these assets after consideration of all available positive and negative evidence. A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax provision is as follows: Years ended December 31, 2022 2023 2021 Tax at statutory rate State income taxes, net of U.S. federal tax benefit Effect of foreign operations Tax on earnings not indefinitely reinvested Unrecognized tax benefits Change in valuation allowance on deferred tax assets Foreign income taxable in the U.S. Foreign tax credit U.S. Base Erosion Anti-Abuse Tax Change in U.S. tax regulations Other Total income tax expense $ $ $ 98,154 (1,487) 9,260 37,061 1,999 (1,770) 11,829 (29,997) 16,837 - 3 141,889 $ $ 124,636 3,038 13,422 71,141 (4,699) (58,696) 14,925 (20,408) 20,918 - (1,255) 163,022 $ 91,268 671 5,521 54,648 1,318 (14,921) 9,532 (9,477) 9,134 (8,276) (3,745) 135,673 F-21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Vishay operates in a global environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate. Part of Vishay's historical strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations to countries where it can take advantage of lower labor costs and available tax and other government-sponsored incentives. With the reduction in the U.S. statutory rate to 21% beginning January 1, 2018, Vishay expects that its effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions. Historically, the effective tax rates were generally less than the U.S. statutory rate of 35% primarily because of earnings in foreign jurisdictions. Income tax expense for the years ended December 31, 2022 and 2021 includes certain discrete tax items for changes in uncertain tax positions, valuation allowances, tax rates, and other related items. These items total $20,032, and $39,326 in 2022 and 2021, respectively. There were no unusual tax items for the year ended December 31, 2023. For the year ended December 31, 2022, the discrete items include tax expense of $59,642 due to the Company's change in its assertion that earnings of its subsidiaries in Germany are indefinitely reinvested, tax benefits of $5,941 for changes in uncertain tax positions following the resolution of a tax audit and a $33,669 tax benefit recognized upon the release of a valuation allowance. For the year ended December 31, 2021, the discrete items include $53,316 of tax expense recognized to accrue the claw-back and withholding taxes to repatriate unremitted foreign earnings from Israel, a $5,714 tax benefit recognized upon the release of a valuation allowance and $8,276 of tax benefits recognized due to changes in tax regulations. At December 31, 2023, the Company had the following significant net operating loss carryforwards for tax purposes: Expires Belgium Israel Japan Netherlands The Republic of China (Taiwan) California Pennsylvania Arizona At December 31, 2023, the Company had the following significant tax credit carryforwards available: U.S. Foreign Tax Credit California Research Credit $ 154,735 No expiration 5,364 No expiration 4,704 10,324 No expiration 11,728 2025- 2033 2026 - 2028 16,517 549,914 15,516 2028 - 2037 2024 - 2043 2032 - 2040 Expires $ 32,468 2028 - 2030 20,983 No expiration F-22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Net income taxes paid were $224,232, $134,199, and $79,106 for the years ended December 31, 2023, 2022, and 2021, respectively. Net income taxes paid for the years ended December 31, 2023 and 2022 include withholding taxes for repatriation activity. Net income taxes paid for the years ended December 31, 2023, 2022, and 2021 also includes $27,670, $14,757, and $14,757, respectively, for the TCJA transition tax. The following table summarizes changes in the liabilities associated with unrecognized tax benefits: Balance at beginning of year Addition based on tax positions related to the current year Addition based on tax positions related to prior years Currency translation adjustments Reduction based on tax positions related to prior years Reduction for settlements Reduction for lapses of statute of limitation Balance at end of year Years ended December 31, 2022 2023 2021 $ $ $ 18,429 1,210 5,455 230 - (10,000) (2,467) $ 12,857 $ 26,719 - 3,197 (366) - (9,420) (1,701) $ 18,429 40,652 141 1,037 (523) (13,154) (982) (452) 26,719 All of the unrecognized tax benefits of $12,857 and $18,429, as of December 31, 2023 and 2022, respectively, would reduce the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2023 and 2022, the Company had accrued interest and penalties related to the unrecognized tax benefits of $1,947 and $2,587, respectively. During the years ended December 31, 2023, 2022, and 2021, the Company recognized $821, $376, and $591, respectively, in interest and penalties. The Company and its subsidiaries file U.S. federal income tax returns, as well as tax returns in multiple states and foreign jurisdictions. During the years ended December 31, 2023, 2022, and 2021, certain tax examinations were concluded and certain statutes of limitations lapsed. The tax provision for those years includes adjustments related to the resolution of these matters, as reflected in the table above. During 2023, the Company settled an examination of its U.S. federal income tax returns for the years ended December 31, 2017 through 2019. The federal income tax returns for subsequent years remain subject to examination. The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2022). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination. The timing of the resolution of income tax examinations is highly uncertain, as are the amounts and timing of tax payments that result from such examinations. These events could cause large fluctuations in the balance sheet classification of current and non-current unrecognized tax benefits. The Company believes that in the next 12 months it is reasonably possible that certain income tax examinations will conclude or the statutes of limitation on certain income tax periods open to examination will expire, or both. Given the uncertainties described above, the Company can only determine an estimate of potential decreases in unrecognized tax benefits ranging from $1,250 to $10,487. F-23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) December 31, 2023 December 31, 2022 $ $ $ - 95,102 750,000 (26,914) 818,188 - 818,188 $ 42,000 465,344 - (6,407) 500,937 - 500,937 Note 6 – Long-Term Debt Long-term debt consists of the following: Credit Facility Convertible senior notes, due 2025 Convertible senior notes, due 2030 Deferred financing costs Less current portion Credit Facility The Company maintains a credit agreement with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent, and the lenders (the "Credit Facility"). On May 8, 2023, the Company entered into an Amendment and Restatement Agreement, which provides an aggregate commitment of $750,000 of revolving loans available until May 8, 2028, replacing an agreement that was scheduled to mature on June 5, 2024. The maturity date of the Credit Facility will accelerate if within ninety-one days prior to the maturity of the Company's convertible senior notes due 2025, the outstanding principal amount of such notes exceed a defined liquidity measure as set forth in the Credit Facility. The Credit Facility also provides for the ability of Vishay to request up to $300,000 of incremental facilities, subject to the satisfaction of certain conditions, which could take the form of additional revolving commitments, incremental “term loan A” or “term loan B” facilities, or incremental equivalent debt. U.S. Dollar borrowings under the Credit Facility bear interest at Secured Overnight Financing Rate ("SOFR") plus a credit spread and an interest margin. The Credit Facility also allows for borrowings in euro, British sterling, and Japanese yen, subject to a $250,000 limit. Borrowings in foreign currency bear interest at a local reference rate plus an interest margin. The applicable interest margin is based on the Company's total leverage ratio. Based on the Company's current total leverage ratio, borrowings bear interest at SOFR plus 1.60%, including the applicable credit spread. The Company also pays a commitment fee, also based on its total leverage ratio, on undrawn amounts. The undrawn commitment fee, based on the Company's total current leverage ratio, is 0.25% per annum. The Credit Facility requires the maintenance of financial covenant ratios. For compliance purposes, pursuant to the Credit Facility, the leverage ratio is computed on a net basis, reducing the measure of outstanding debt by up to $250,000 of unrestricted cash. The Company must maintain a net leverage ratio of at least 3.25 to 1.00. Borrowings under the Credit Facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of the Company and certain significant subsidiaries located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries. The Credit Facility limits or restricts the Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming the Company’s pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming the Company's pro forma net leverage ratio is greater than 2.50 to 1.00), and requires the Company to comply with other covenants. The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, material misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings, the insolvency of the Company or certain of its significant subsidiaries, and the rendering of a judgment in excess of $50,000 against the Company or its subsidiaries. Upon the occurrence of an event of default under the Credit Facility, the Company's obligations under the credit facility may be accelerated and the lending commitments under the credit facility may be terminated. At December 31, 2023 and 2022, there was $748,578 and $707,061, respectively, available under the Credit Facility. Letters of credit totaling $1,422 and $939 were outstanding at December 31, 2023 and 2022, respectively. F-24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 6 – Long-Term Debt (continued) Convertible Debt Instruments The following table summarizes some key facts and terms regarding the outstanding convertible senior notes as of December 31, 2023: Due 2025 Issuance date Maturity date Principal amount Cash coupon rate (per annum) Conversion rate effective December 12, 2023 (per $1 principal amount) Effective conversion price effective December 12, 2023 (per share) 130% of the conversion price (per share) Convertible Senior Notes due 2030 $ $ $ June 12, 2018 June 15, 2025 95,102 2.25% 32.1268 31.13 40.47 Due 2030 September 12, 2023 September 15, 2030 750,000 $ 2.25% 33.1609 30.16 39.21 $ $ In September 2023, the Company issued $750,000 aggregate principal amount of 2.25% convertible senior notes due 2030 (the “2030 Notes”) to qualified institutional buyers pursuant to an exemption from registration provided by Rule 144A under the Securities Act. The Company used the net proceeds from this offering to repurchase $370,242 principal amount of its outstanding 2.25% convertible senior notes due 2025 (the “2025 Notes”) (as further described below), to reduce the outstanding balance of its Credit Facility, to enter into capped call transactions (as further described below), and for other general corporate purposes. The 2030 Notes bear interest at a rate of 2.25% per year payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2024. The 2030 Notes mature on September 15, 2030, unless earlier repurchased or converted. The 2030 Notes are convertible into shares of Vishay common stock at an initial conversion rate of 33.1609 shares of common stock per $1 principal amount of the notes, subject to adjustment. This initial conversion price represents a premium of 20% to the closing price of Vishay's common stock on September 7, 2023, which was $25.13 per share. This represents an initial effective conversion price of approximately $30.16 per share. The conversion rate of the 2030 Notes is not adjusted for quarterly cash dividends equal to or less than $0.10 per share of common stock. Pursuant to the indenture governing the 2030 Notes, the Company is required to satisfy its conversion obligations by paying cash equal to the principal amount of notes and settle any additional value in cash and/or shares at its discretion. Vishay must provide additional shares upon conversion if there is a "fundamental change" in the business as defined in the indenture governing the notes. The Company may not redeem the 2030 Notes prior to September 20, 2027. The Company may redeem for cash all or part of the 2030 Notes, at its option, on or after September 20, 2027, if the sale price of Vishay’s common stock has been at least 130% of the conversion price for a specified period at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. If the Company elects to redeem fewer than all of the outstanding 2030 Notes, at least $100,000 aggregate principal amount of 2030 Notes must be outstanding and not subject to redemption. Prior to March 15, 2030, the holders of the 2030 Notes may convert their notes only under the following conditions: (1) the sale price of Vishay common stock reaches 130% of the applicable conversion price for a specified period during any fiscal quarter commencing after the fiscal quarter ending on December 31, 2023; (2) the trading price of the notes falls below 98% of the product of the last reported sale price of Vishay’s common stock and the conversion rate for a specified period; (3) the Company calls any or all of the 2030 Notes for redemption; or (4) upon the occurrence of specified corporate transactions. Capped Call Transactions In September 2023, in connection with the pricing and initial purchasers’ exercise in full of their option to purchase additional 2030 Notes, the Company entered into separate base and additional privately negotiated capped call transactions with an affiliate of an initial purchaser and certain other financial institutions. The capped call will initially cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the 2030 Notes. The Company used $94,200 of the net proceeds from the 2030 Notes to pay the cost of the capped call transactions. The cap price of the capped call will initially be $43.98 per share, which represents a premium of approximately 75% over the last reported sale price of the Company’s common stock on September 7, 2023, and is subject to certain adjustments under the terms of the capped call. The capped call transactions are separate transactions entered into by the Company with each of the capped call counterparties, are not part of the terms of the 2030 Notes, and do not affect any holder’s rights under the 2030 Notes. Holders of the 2030 Notes do not have any rights with respect to the capped call. The capped call is classified within stockholders’ equity on the consolidated balance sheet. F-25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 6 – Long-Term Debt (continued) Convertible Senior Notes due 2025 The Company used $386,745 of the net proceeds from the offering of the 2030 Notes to repurchase $370,242 principal amount of its outstanding 2025 Notes. As a result, the Company recognized a loss on early extinguishment of the 2025 Notes of $18,874, including the write-off of a portion of unamortized debt issuance costs. Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the notes falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions. The convertible senior notes due 2025 are not currently convertible. Upon conversion of the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock. The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible senior notes due 2025 effective as of the ex-dividend date of each cash dividend. The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $0.085 per share of common stock. Other Borrowings Information The Credit Facility, of which no amount was drawn as of December 31, 2023, expires in 2028. The convertible senior notes mature in 2025 and 2030, respectively. At December 31, 2023 and 2022, the Company had committed and uncommitted credit lines with various foreign banks aggregating approximately $34,000 and $1,000, respectively, with substantially no amounts borrowed. Interest paid was $17,242, $13,739, and $14,177 for the years ended December 31, 2023, 2022, and 2021, respectively. Deferred financing costs are recognized as non-cash interest expense. Non-cash interest expense was $3,735, $3,272, and $3,272 for the years ended December 31, 2023, 2022, and 2021, respectively. See Note 18 for further discussion on the fair value of the Company’s long-term debt. F-26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 7 – Stockholders’ Equity The Company’s Class B common stock carries 10 votes per share while the common stock carries 1 vote per share. Class B shares are transferable only to certain permitted transferees while the common stock is freely transferable. Class B shares are convertible on a one-for-one basis at any time into shares of common stock. Transfers of Class B shares other than to permitted transferees result in the automatic conversion of the Class B shares into common stock. The Board of Directors may only declare dividends or other distributions with respect to the common stock or the Class B common stock if it grants such dividends or distributions in the same amount per share with respect to the other class of stock. Stock dividends or distributions on any class of stock are payable only in shares of stock of that class. Shares of either common stock or Class B common stock cannot be split, divided, or combined unless the other is also split, divided, or combined equally. Cash dividends were paid quarterly in 2023 and 2022. The Credit Facility also allows an unlimited amount of defined "Restricted Payments," which include cash dividends and share repurchases, provided the Company's pro forma net leverage ratio is equal to or less than 2.50 to 1.00. If the Company's pro forma net leverage ratio is greater than 2.50 to 1.00, the Credit Facility allows such payments up to $100,000 per annum (subject to a cap of $300,000 for the term of the facility, with up to $25,000 of any unused amount of the $100,000 per annum base available for use in the next succeeding calendar year). At December 31, 2023, the Company had reserved shares of common stock for future issuance as follows: Restricted stock units outstanding Phantom stock units outstanding 2023 Long-Term Incentive Plan - available to grant Convertible senior notes, due 2025 Convertible senior notes, due 2030 Conversion of Class B common stock Total 1,717,000 120,000 5,250,847 3,055,323 24,870,675 12,097,148 47,110,993 In 2022, the Company's Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. The Stockholder Return Policy calls for the Company to return a prescribed amount of cash flows on an annual basis. The Company intends to return such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases. The following table summarizes activity pursuant to this policy: Dividends paid to stockholders Stock repurchases Total Years ended December 31, 2023 2022 $ $ 55,626 78,684 134,310 $ $ 57,187 82,972 140,159 The repurchased shares are being held as treasury stock. The number of shares of common stock being held as treasury stock was 7,535,881 and 4,240,573 as of December 31, 2023 and 2022, respectively. F-27 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 8 – Details of Expenses The caption “Other” on the accompanying consolidated statements of operations consists of the following: Years ended December 31, 2022 2023 2021 Foreign exchange gain (loss) Interest income Other components of periodic pension expense Investment income (expense) Other Impact of the COVID-19 Pandemic $ $ $ 677 31,353 (8,730) 1,347 616 25,263 $ $ 5,690 7,560 (11,090) (6,812) (200) (4,852) $ (2,692) 1,269 (13,206) (1,036) 11 (15,654) The Company's operations were impacted by the "COVID-19" pandemic, particularly in 2020 and again in 2022 when operations in the People's Republic of China were impacted by government-mandated shut-downs. The Company incurred incremental costs separable from normal operations that are directly related to the pandemic containment efforts, primarily wages paid to manufacturing employees during government-mandated shut-downs, additional wages and hardship allowances for working during lockdown periods, additional costs of cleaning and disinfecting facilities, costs of additional safety equipment for employees, and temporary housing for employees due to travel restrictions, which were partially offset by government subsidies. Since 2021, certain costs directly attributable to the pandemic, such as additional costs of cleaning and disinfecting facility and costs of additional safety equipment for employees, are no longer incremental and are considered normal operating costs. The net impact of the costs and subsidies are reported as "Cost of products sold" of $6,661 and "Selling, general, and administrative expenses" of $546 based on employee function on the consolidated statement of operations for the year ended December 31, 2022. F-28 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 9 – Other Accrued Expenses Other accrued expenses consist of the following: Sales returns and allowances Goods received, not yet invoiced Accrued VAT taxes payable Other Sales returns and allowances accrual activity is shown below: Beginning balance Sales returns and allowances Credits issued Foreign currency Ending balance $ $ December 31, 2023 2022 $ $ 47,760 44,657 56,218 90,715 239,350 $ $ 46,979 60,201 55,010 99,416 261,606 Years Ended December 31, 2022 2023 2021 $ 46,979 101,696 (101,324) 409 47,760 $ $ 39,759 102,640 (94,682) (738) 46,979 $ 39,629 89,832 (88,708) (994) 39,759 F-29 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 10 – Accumulated Other Comprehensive Income (Loss) The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows: Balance at January 1, 2021 Other comprehensive income before reclassifications Tax effect Other comprehensive income before reclassifications, net of tax Amounts reclassified out of AOCI Tax effect Amounts reclassified out of AOCI, net of tax Net comprehensive income (loss) Balance at December 31, 2021 Other comprehensive income before reclassifications Tax effect Other comprehensive income before reclassifications, net of tax Amounts reclassified out of AOCI Tax effect Amounts reclassified out of AOCI, net of tax Net comprehensive income (loss) Balance at December 31, 2022 Other comprehensive income before reclassifications Tax effect Other comprehensive income before reclassifications, net of tax Amounts reclassified out of AOCI Tax effect Amounts reclassified out of AOCI, net of tax Net comprehensive income (loss) Balance at December 31, 2023 Pension and other post- retirement actuarial items Currency translation adjustment Total $ $ $ $ $ $ $ (77,075) $ 12,592 (2,509) 10,083 10,677 (2,593) 8,084 $ 18,167 (58,908) $ 60,949 (15,783) 45,166 8,260 (2,116) 6,144 $ 51,310 (7,598) $ (10,338) 2,462 (7,876) 1,181 (306) 875 (7,001) $ (14,599) $ 90,634 $ (51,978) $ - $ (51,978) $ $ - $ - - $ (51,978) $ 38,656 $ (41,885) $ $ - (41,885) $ $ - $ - $ - (41,885) $ (3,229) $ $ 28,165 $ - $ 28,165 $ - $ - $ - $ 28,165 $ 24,936 13,559 (39,386) (2,509) (41,895) 10,677 (2,593) 8,084 (33,811) (20,252) 19,064 (15,783) 3,281 8,260 (2,116) 6,144 9,425 (10,827) 17,827 2,462 20,289 1,181 (306) 875 21,164 10,337 Other comprehensive income (loss) includes Vishay's proportionate share of other comprehensive income (loss) of nonconsolidated subsidiaries accounted for under the equity method. F-30 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits The Company maintains various retirement benefit plans. GAAP requires employers to recognize the funded status of a benefit plan, measured as the difference between plan assets at fair value and the benefit obligation, in its balance sheet. The recognition of the funded status on the balance sheet requires employers to recognize actuarial items (such as actuarial gains and losses, prior service costs, and transition obligations) as a component of other comprehensive income, net of tax. The following table summarizes amounts recorded on the accompanying consolidated balance sheets associated with these various retirement benefit plans: Included in "Other assets": Non-U.S. pension plans Total included in other assets Included in "Payroll and related expenses": U.S. pension plans Non-U.S. pension plans U.S. other postretirement plans Non-U.S. other postretirement plans Total included in payroll and related expenses Accrued pension and other postretirement costs: U.S. pension plans Non-U.S. pension plans U.S. other postretirement plans Non-U.S. other postretirement plans Other retirement obligations Total accrued pension and other postretirement costs Accumulated other comprehensive loss: U.S. pension plans Non-U.S. pension plans U.S. other postretirement plans Non-U.S. other postretirement plans Total accumulated other comprehensive loss* * - Amounts included in accumulated other comprehensive loss are presented in this table pre-tax Defined Benefit Pension Plans U.S. Pension Plans December 31, 2023 2022 3,929 3,929 $ $ 4,715 4,715 (1,474) $ (7,149) (510) (390) (9,523) $ (29,217) $ (144,276) (3,750) (7,173) (11,087) (195,503) $ (522) $ 24,891 (1,527) 1,488 24,330 $ (6,378) (6,827) (497) (666) (14,368) (30,843) (135,809) (3,831) (6,049) (10,560) (187,092) 69 16,392 (2,031) 743 15,173 $ $ $ $ $ $ $ $ The Company maintained several defined benefit pension plans which covered most full-time U.S. employees. These included pension plans which are “qualified” under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code, and “non-qualified” pension plans which provide defined benefits primarily to U.S. employees whose benefits under the qualified pension plan would be limited by ERISA and the Internal Revenue Code. The Company’s principal qualified U.S. pension plan (the Vishay Retirement Plan) was frozen effective January 1, 2009 and terminated in 2016. The Company’s principal non-qualified U.S. pension plan (the Vishay Non-qualified Retirement Plan) was a contributory pension plan designed to provide similar defined benefits to covered U.S. employees whose benefits under the Vishay Retirement Plan were limited by the Internal Revenue Code. The Vishay Non- qualified Retirement Plan was similar in construction to the Vishay Retirement Plan, except that the plan is not qualified under the Internal Revenue Code. The Vishay Non-qualified Retirement Plan, like all non-qualified plans, is considered to be unfunded. The Company maintains a non-qualified trust, referred to as a “rabbi” trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the non-qualified pension plan were $21,095 and $20,615 at December 31, 2023 and 2022, respectively. F-31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) In 2008, the Company adopted amendments to the Vishay Non-Qualified Retirement Plan such that effective January 1, 2009, the plan was frozen. Pursuant to these amendments, no new employees may participate in the plans, no further participant contributions were required or permitted, and no further benefits shall accrue after December 31, 2008. Benefits accumulated as of December 31, 2008 will be paid to employees upon or following retirement, and the Company will likely need to make additional cash contributions to the rabbi trust to fund this accumulated benefit obligation. The Company also maintains other pension plans which provide supplemental defined benefits primarily to former U.S. employees whose benefits under qualified pension plans were limited by the Internal Revenue Code. These non-qualified plans are all non-contributory plans, and are considered to be unfunded. In 2004, the Company entered into an employment agreement with Dr. Felix Zandman, its Executive Chairman and then-Chief Executive Officer. Pursuant to this agreement, the Company is providing an annual retirement benefit of approximately $614 to his surviving spouse. The Company maintains a non-qualified trust, referred to as a “rabbi” trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to this non-qualified pension plan were $445 and $1,023 at December 31, 2023 and 2022, respectively. Non-U.S. Pension Plans The Company provides pension and similar benefits to employees of certain non-U.S. subsidiaries consistent with local practices. Pension benefits earned are generally based on years of service and compensation during active employment. The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to U.S. and non-U.S. pension plans: December 31, 2023 U.S. Plans Non-U.S. Plans December 31, 2022 U.S. Plans Non-U.S. Plans Change in benefit obligation: Benefit obligation at beginning of year Service cost Interest cost Plan amendments Actuarial (gains) losses Benefits paid Curtailments and settlements Currency translation Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Company contributions Benefits paid Currency translation Fair value of plan assets at end of year Funded status at end of year $ $ $ $ $ $ 37,221 - 1,997 - (272) (8,255) - - 30,691 $ $ - - 8,255 (8,255) - - $ $ 203,541 3,063 7,346 (15) 8,835 (17,160) (27) 5,200 210,783 $ $ 65,620 1,976 12,161 (17,160) 690 63,287 $ $ 45,613 - 1,122 - (7,668) (1,846) - - 37,221 $ $ - - 1,846 (1,846) - - $ 278,173 4,199 3,200 79 (45,102) (16,777) - (20,231) 203,541 75,920 790 13,212 (16,777) (7,525) 65,620 (30,691) $ (147,496) $ (37,221) $ (137,921) F-32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) The plan assets are stated at fair value. See Note 18 for further discussion of the valuation of the plan assets. Amounts recognized in the accompanying consolidated balance sheets consist of the following: Other assets Accrued benefit liability - current Accrued benefit liability - non-current Accumulated other comprehensive loss Actuarial items consist of the following: Unrecognized net actuarial (gain) loss Unamortized prior service cost December 31, 2023 U.S. Plans Non-U.S. Plans December 31, 2022 U.S. Plans Non-U.S. Plans - $ (1,474) (29,217) (522) (31,213) $ $ 3,929 (7,149) (144,276) 24,891 (122,605) $ $ - (6,378) (30,843) 69 (37,152) $ 4,715 (6,827) (135,809) 16,392 (121,529) December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans (588) $ 66 (522) $ 24,094 797 24,891 $ $ (140) $ 209 69 $ 15,628 764 16,392 $ $ $ $ The following table sets forth additional information regarding the projected and accumulated benefit obligations: December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Accumulated benefit obligation, all plans $ 30,691 $ 194,361 $ 37,221 $ 176,056 Plans for which the accumulated benefit obligation exceeds plan assets: Projected benefit obligation Accumulated benefit obligation Fair value of plan assets The following table sets forth the components of net periodic pension cost: $ 30,691 $ 30,691 - $ 146,898 144,213 3,032 37,221 $ 37,221 - 181,207 159,433 38,854 2023 Years ended December 31, 2022 2021 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost Interest cost Expected return on plan assets Amortization of actuarial losses Amortization of prior service cost Curtailment and settlement losses Net periodic pension cost $ $ - 1,997 - 175 144 - 2,316 $ $ $ 3,063 7,346 (2,270) 345 195 546 9,225 $ - 1,122 - 1,523 144 - 2,789 $ $ $ 4,199 3,200 (1,725) 4,760 216 1,190 11,840 $ - 1,016 - 2,032 144 - 3,192 $ $ 4,693 2,968 (1,660) 7,444 189 632 14,266 F-33 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) See Note 10 for the pretax, tax effect and after tax amounts included in other comprehensive income during the years ended December 31, 2023, 2022, and 2021. The estimated actuarial items for the defined benefit pensions plans that will be amortized from accumulated other comprehensive loss into net periodic pension cost during 2024 are not material. The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years: Discount rate Rate of compensation increase 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans 5.25% 0.00% 3.36% 3.12% 5.50% 0.00% 3.57% 2.60% The following weighted average assumptions were used to determine the net periodic pension costs: Discount rate Rate of compensation increase Expected return on plan assets Years ended December 31, 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans 5.50% 0.00% 0.00% 3.57% 2.60% 4.11% 2.50% 0.00% 0.00% 1.19% 2.07% 2.96% The plans’ expected return on assets is based on management’s expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, advice from pension consultants and investment advisors, and current economic and capital market conditions. The investment mix between equity securities and fixed income securities is based upon achieving a desired return, balancing higher return, more volatile equity securities, and lower return, less volatile fixed income securities and is adjusted for the expected duration of the obligation and the funded status of the plan. Investment allocations are made across a range of securities, maturities and credit quality. The Company’s non-U.S. defined benefit plan investments are based on local laws and customs. Most plans invest in cash and local government fixed income securities, although plans in certain countries have investments in equity securities. The plans do not invest in securities of Vishay or its subsidiaries. Negative investment returns could ultimately affect the funded status of the plans, requiring additional cash contributions. See Note 18 for further information on the fair value of the plan assets by asset category. Estimated future benefit payments are as follows: 2024 2025 2026 2027 2028 2029-2033 U.S. Plans Non-U.S. Plans $ 3,347 $ 3,301 1,941 8,306 3,198 9,415 14,897 15,450 17,775 14,830 14,744 74,939 The Company’s anticipated 2024 contributions for defined benefit pension plans will approximate the expected benefit payments disclosed above. F-34 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) Other Postretirement Benefits In the U.S., the Company maintains unfunded non-pension postretirement plans, including medical benefits for certain executives and their surviving spouses, which are funded as costs are incurred. The Company also maintains two unfunded non-pension postretirement plans at two European subsidiaries. The following table sets forth a reconciliation of the benefit obligation, plan assets, and accrued benefit cost related to U.S. and non-U.S. non-pension defined benefit postretirement plans: December 31, 2023 U.S. Plans Non-U.S. Plans December 31, 2022 U.S. Plans Non-U.S. Plans Change in benefit obligation: Benefit obligation at beginning of year Service cost Interest cost Actuarial (gains) losses Benefits paid Currency translation Benefit obligation at end of year Fair value of plan assets at end of year Funded status at end of year $ $ $ $ Amounts recognized in the accompanying consolidated balance sheets consist of the following: $ 4,328 21 225 183 (497) - 4,260 $ $ 6,715 221 251 801 (681) 256 7,563 $ $ 7,611 39 178 (2,525) (975) - 4,328 $ 7,782 237 55 (749) (147) (463) 6,715 - $ - $ - $ - (4,260) $ (7,563) $ (4,328) $ (6,715) Accrued benefit liability - current Accrued benefit liability - non-current Accumulated other comprehensive (income) loss December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans $ $ (510) $ (3,750) (1,527) (5,787) $ (390) $ (7,173) 1,488 (6,075) $ (497) $ (3,831) (2,031) (6,359) $ (666) (6,049) 743 (5,972) F-35 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) Actuarial items consist of the following: Unrecognized net actuarial loss (gain) The following table sets forth the components of net periodic benefit cost: December 31, 2023 U.S. Plans Non-U.S. Plans December 31, 2022 U.S. Plans Non-U.S. Plans $ $ (1,527) $ (1,527) $ 1,488 1,488 $ $ (2,031) $ (2,031) $ 743 743 2023 U.S. Plans Non-U.S. Plans Years ended December 31, 2022 U.S. Plans Non-U.S. Plans 2021 U.S. Plans Non-U.S. Plans Service cost Interest cost Amortization of actuarial (gains) losses Curtailment and settlement losses Net periodic benefit cost (benefit) $ $ $ 21 225 (321) - (75) $ 221 251 8 89 569 $ $ 39 178 342 - 559 $ $ 237 55 85 - 377 $ $ 102 163 53 - 318 $ $ 278 42 116 67 503 The estimated actuarial items for the other postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2024 are not material. The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years: Discount rate Rate of compensation increase 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans 5.25% 0.00% 3.40% 4.00% 5.50% 0.00% 3.86% 4.19% The following weighted average assumptions were used to determine the net periodic benefit costs: Discount rate Rate of compensation increase Years ended December 31, 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans 5.50% 0.00% 3.86% 4.19% 2.50% 0.00% 0.80% 2.88% The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation is not material. F-36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) Estimated future benefit payments are as follows: 2024 2025 2026 2027 2028 2029-2033 U.S. Plans Non-U.S. Plans $ 510 $ 499 467 452 416 1,594 390 621 205 1,525 785 4,897 As the plans are unfunded, the Company’s anticipated contributions for 2024 are equal to its estimated benefits payments. Other Retirement Obligations The Company participates in various other defined contribution and government-mandated retirement plans based on local law or custom. The Company periodically makes required contributions for certain of these plans, whereas other plans are unfunded retirement bonus plans which will be paid at the employee's retirement date. At December 31, 2023 and 2022, the accompanying consolidated balance sheets include $11,087 and $10,560, respectively, within accrued pension and other postretirement costs related to these plans. The Company’s U.S. employees are eligible to participate in a 401(k) savings plan, which provides for Company matching contributions. The Company’s matching expense for the plans was $7,641, $7,083, and $6,557 for the years ended December 31, 2023, 2022, and 2021, respectively. No material amounts are included in the accompanying consolidated balance sheets at December 31, 2023 and 2022 related to unfunded 401(k) contributions. Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2023, 2022, and 2021, these employees could defer a portion of their compensation until retirement, or elect shorter deferral periods. The Company maintains a liability within other noncurrent liabilities on its consolidated balance sheets related to these deferrals. The Company maintains a non-qualified trust, referred to as a “rabbi” trust, to fund payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the deferred compensation plan at December 31, 2023 and 2022 were approximately $28,838 and $28,535, respectively. F-37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 12 – Stock-Based Compensation 2023 Long-Term Incentive Plan The Company implemented the Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan") after receiving stockholder approval at its 2023 Annual Meeting of Stockholders on May 23, 2023. The 2023 Plan allows the Company to grant up to 6,000,000 shares (subject to certain adjustments described in the 2023 Plan) of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, phantom stock units, and other cash-based awards to employees, directors, consultants, and other service providers of the Company and its affiliates. Such instruments are available for grant until March 24, 2033. The Company has granted approximately 761,000 time-vested restricted stock units to employees pursuant to the 2023 Plan. At December 31, 2023, the Company has reserved 5,250,847 shares of common stock for future grants of equity awards pursuant to the 2023 Plan. 2007 Stock Incentive Program Under the Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, certain executive officers and board members of the Company were granted restricted stock units. No further awards will be granted pursuant to the 2007 Program. Pursuant to the terms of the 2023 Plan, any shares of common stock that are subject to outstanding awards granted pursuant to the 2007 Program that subsequently cease to be subject to such awards as a result of the termination, expiration, cancellation, or forfeiture of such awards and any shares of common stock withheld in settlement of tax withholding obligations associated with outstanding awards granted pursuant to the 2007 Program may become available for issuance under the 2023 Plan. A total of 1,294,546 shares of common stock were subject to awards granted pursuant to the 2007 Program as of May 23, 2023. All RSUs granted pursuant to the 2007 Program and the 2023 Plan contain service vesting conditions. Certain RSUs also contain performance or market vesting conditions. The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes. The following table summarizes share-based compensation expense recognized: Restricted stock units Phantom stock units Total Years ended December 31, 2022 2023 2021 $ $ 16,425 107 16,532 $ $ 6,323 222 6,545 $ $ 6,396 209 6,605 The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at December 31, 2023 (amortization periods in years): Restricted stock units Phantom stock units Total Weighted Average Remaining Amortization Periods 1.6 0.0 Unrecognized Compensation Cost $ $ 15,174 - 15,174 The Company currently expects all performance-based RSUs to vest and all of the associated unrecognized compensation cost for performance-based RSUs presented in the table above to be recognized. F-38 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 12 – Stock-Based Compensation (continued) Restricted Stock Units Each RSU entitles the recipient to receive a share of common stock when the RSU vests. RSU activity is presented below (number of RSUs in thousands): 2023 Weighted Average Grant-date Fair Value Number of RSUs Years ended December 31, 2022 Number of RSUs Weighted Average Grant-date Fair Value 2021 Weighted Average Grant-date Fair Value Number of RSUs Outstanding: Beginning of year Granted* Vested** Cancelled or forfeited End of year Expected to vest 19.73 24.34 18.86 24.83 23.03 $ 894 1,180 (342) (15) 1,717 $ 1,702 20.08 19.13 20.04 20.50 19.73 $ 877 336 (306) (13) $ 894 894 18.90 22.07 18.79 - 20.08 $ 793 319 (235) - 877 $ 877 * Employees in certain countries are granted equity-linked awards that will be settled in cash and are accounted for as liability awards. The liability awards are not material. The number of RSUs granted excludes these awards. ** The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements. The number of performance-based RSUs that are scheduled to vest increases ratably based on the achievement of defined performance and market criteria between the established target and maximum levels. RSUs with performance-based and market-based vesting criteria are expected to vest as follows (number of RSUs in thousands): Vesting Date January 1, 2024*** January 1, 2025 January 1, 2026 Expected to Vest Not Expected to Vest Total 165 168 157 - - 15 165 168 172 *** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2024 were achieved. In the event of (i) any termination (other than for cause) after attaining retirement age (as defined in the respective executive's employment arrangement), the executive's outstanding RSUs shall immediately vest and the outstanding performance-based RSUs shall vest on their normal vesting date to the extent applicable performance criteria are realized; (ii) a change of control of Vishay in which the executive's RSUs and performance-based RSUs are not assumed or continued, all of such executive’s outstanding RSUs and performance-based RSUs shall immediately vest; (iii) a change of control of Vishay in which the executive's RSUs and performance-based RSUs are assumed or continued, upon termination without cause or good reason the executive's outstanding RSUs and performance-based RSUs. In the event of voluntary termination by the executive prior to attaining retirement age or termination for cause, the executive’s outstanding RSUs and performance-based RSUs will be forfeited. F-39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 12 – Stock-Based Compensation (continued) Phantom Stock Units Each phantom stock unit entitles the recipient to receive a share of common stock at the individual's termination of employment or any other future date specified in the applicable employment agreement. Phantom stock units participate in dividend distribution on the same basis as the Company's common stock and Class B common stock. Dividend equivalents are issued in the form of additional units of phantom stock. The phantom stock units are fully vested at all times. The following table summarizes the Company’s phantom stock units activity (number of phantom stock units in thousands): 2023 Years ended December 31, 2022 2021 Number of Phantom Stock Units Grant-date Fair Value per Unit Number of Phantom Stock Units Grant-date Fair Value per Unit Number of Phantom Stock Units Grant-date Fair Value per Unit Outstanding: Beginning of year Granted Dividend equivalents issued Redeemed for common stock* End of year * The number of phantom stock units redeemed for common stock includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements. 226 5 2 (113) 120 212 10 4 - 226 198 10 4 - 212 22.20 20.89 21.48 $ $ $ F-40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 13 – Commitments and Contingencies Environmental Matters The Company is subject to various federal, state, local, and foreign laws and regulations governing environmental matters, including the use, discharge, and disposal of hazardous materials. The Company’s manufacturing facilities are believed to be in substantial compliance with current laws and regulations. Complying with current laws and regulations has not had a material adverse effect on the Company’s financial condition. The Company has engaged environmental consultants and attorneys to assist management in evaluating potential liabilities related to environmental matters. Management assesses the input from these consultants along with other information known to the Company in its effort to continually monitor these potential liabilities. Management assesses its environmental exposure on a site-by-site basis, including those sites where the Company has been named as a “potentially responsible party.” Such assessments include the Company’s share of remediation costs, information known to the Company concerning the size of the hazardous waste sites, their years of operation, and the number of past users and their financial viability. As of December 31, 2023, the Company has accrued environmental liabilities of $12,430, of which $2,936 is included in other accrued liabilities on the accompanying consolidated balance sheet, and $9,494 is included in other noncurrent liabilities on the accompanying consolidated balance sheet. While the ultimate outcome of these matters cannot be determined, management does not believe that the final disposition of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. The Company’s present and past facilities have been in operation for many years. These facilities have used substances and have generated and disposed of wastes which are or might be considered hazardous. Therefore, it is possible that additional environmental issues may arise in the future, which the Company cannot now predict. Litigation The Company is a party to various claims and lawsuits arising in the normal course of business. The Company is of the opinion that these litigations or claims will not have a material negative effect on its consolidated financial position, results of operations, or cash flows. Long-Term Purchase Agreements The Company maintains long-term purchase agreements with subcontractors, suppliers, and other business partners to ensure access to external capacity and supply. The Company has minimum purchase commitments pursuant to certain of its long-term arrangements with its subcontractors and other suppliers and business partners of $57,824 and $29,109 for the years 2024 through 2025, respectively. Certain minimum purchase commitments are based on an 18-month rolling forecast and, accordingly, the 2025 minimum purchase commitments will likely increase. The Company has the option to purchase amounts in addition to the minimum commitment and, accordingly, actual purchases may be different than the amounts disclosed above. The Company exceeded its minimum purchase commitments in 2023. Product Quality Claims The Company is a party to various product quality claims in the normal course of business. See Note 1 for further information on the Company's warranty obligations. Executive Employment Agreements The Company has employment agreements with certain of its senior executives. These employment agreements provide incremental compensation in the event of termination. The Company does not provide any severance or other benefits specifically upon a change in control. F-41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 14 – Current Vulnerability Due to Certain Concentrations Market Concentrations No customer represented greater than 10% of consolidated net revenue in 2023 or 2022. A material portion of the Company's revenues are derived from the worldwide industrial, automotive, telecommunications, and computing markets. These markets have historically experienced wide variations in demand for end products. If demand for these end products should decrease, the producers thereof could reduce their purchases of the Company's products, which could have an adverse effect on the Company's results of operations and financial position. Certain subsidiaries and product lines have customers which comprise greater than 10% of the subsidiary's or product line's net revenues. The loss of one of these customers could have a material effect on the results of operations of the subsidiary or product line and financial position of the subsidiary, which could result in an impairment charge which could be material to the Company's consolidated financial statements. Credit Risk Concentrations Financial instruments with potential credit risk consist principally of cash and cash equivalents, short-term investments, accounts receivable, and notes receivable. Concentrations of credit risk with respect to receivables are generally limited due to the Company’s large number of customers and their dispersion across many countries and industries. As of December 31, 2023, one customer comprised 12.4% of the Company's accounts receivable balance. As of December 31, 2022, one customer comprised 10.2% of the Company's accounts receivable balance. The Company continually monitors the credit risks associated with its accounts receivable and adjusts the allowance for uncollectible accounts accordingly. The credit risk exposure associated with the accounts receivable is limited by the allowance and is not considered material to the financial statements. The Company maintains cash and cash equivalents and short-term investments with various major financial institutions. The Company is exposed to credit risk related to the potential inability to access liquidity in financial institutions where its cash and cash equivalents and short-term investments are concentrated. As of December 31, 2023, the following financial institutions held over 10% of the Company’s combined cash and cash equivalents and short-term investments balance: JPMorgan* Santander* TD Bank* MUFG Bank Ltd.* Bank of America* *Participant in Credit Facility Sources of Supplies 16.2% 16.2% 15.0% 10.8% 10.1% The production and sale of the Company’s products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party foundries and subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all other parts of the supply chain. Global shipping impacts several parts of the supply chain and the disruption experienced in recent years has, at times, negatively impacted the Company’s ability to manufacture products and to deliver them to customers. Although most materials incorporated into the Company's products are available from a number of sources, certain materials, including plastics and metals, are produced in only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times, face capacity constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost of our supply. The unavailability or reduced availability of these materials could require the Company to temporarily cease or reduce production or incur additional costs. Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of these materials. Many of the metals used in the manufacture of the Company’s products, including gold, copper, and palladium, are traded on active markets and can be subject to significant price volatility. To ensure adequate supply and to provide cost certainty, the Company’s policy is to enter into short-term commitments to purchase defined portions of annual consumption of the raw materials utilized if market prices decline below budget. If after entering into these commitments, the market prices for these raw materials decline, losses are recognized on these adverse purchase commitments. F-42 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 14 – Current Vulnerability Due to Certain Concentrations (continued) The Company's production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources could require the Company to reduce production or incur additional costs. The Company uses third-party foundries and subcontractors for certain of its manufacturing activities, primarily wafer fabrication and the assembly and testing of finished goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. The Company's agreements with these manufacturers typically require it to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require the recognition of losses on these adverse purchase commitments. The Company's agreements may limit its ability to increase production, particularly during periods of growing demand for our products. Geographic Concentration The Company has operations outside the United States, and approximately 74% of revenues earned during 2023 were derived from sales to customers outside the United States. Additionally, as of December 31, 2023, $660,258 of the Company’s cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Some of the Company’s products are produced and cash and cash equivalents and short-term investments are held in countries which are subject to risks of political, economic, and military instability. This instability could result in wars, riots, nationalization of industry, currency fluctuations, and labor unrest. These conditions could have an adverse impact on the Company’s ability to operate in these regions and, depending on the extent and severity of these conditions, could materially and adversely affect the Company’s overall financial condition, operating results, and ability to access its liquidity when needed. As of December 31, 2023 the Company’s cash and cash equivalents and short-term investments were concentrated in the following countries: United States People's Republic of China Israel The Republic of China (Taiwan) Germany Singapore Other Asia Other Europe Other 50.2% 10.7% 10.6% 9.2% 6.8% 6.3% 3.8% 1.2% 1.2% Certain of the Company's non-U.S. subsidiaries have cash and cash equivalents and short-term investments deposited in U.S. financial institutions. Vishay has been in operation in Israel for 53 years. The Company has never experienced any material interruption in its operations attributable to these factors, in spite of several Middle East crises, including wars. F-43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 15 – Segment and Geographic Data Vishay is a global manufacturer and supplier of electronic components. Vishay operates, and its chief operating decision maker makes strategic and operating decisions with regards to assessing performance and allocating resources based on, six reporting segments: MOSFETs, Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors. These segments represent groupings of product lines based on their functionality: ● ● ● ● ● ● Metal oxide semiconductor field effect transistors ("MOSFETs") function as solid state switches to control power. Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering. Optoelectronic components emit light, detect light, or do both. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. Inductors use an internal magnetic field to change alternating current phase and resist alternating current. Capacitors store energy and discharge it when needed. Vishay's reporting segments generate substantially all of their revenue from product sales to the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets. An immaterial portion of revenues are from royalties. The Company’s chief operating decision maker uses operating income, exclusive of certain items ("segment operating income") to make decisions, allocate resources, and assess performance, and the Company thus considers segment operating income to be its measure of segment profit or loss. Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segment operating income. The Company's calculation of segment operating income excludes selling, general, and administrative costs of its global operations, sales and marketing, information systems, finance, and administration groups, as well as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items affecting comparability. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company. These items represent reconciling items between segment operating income and consolidated operating income. Business segment assets are the owned or allocated assets used by each business. F-44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 15 – Segment and Geographic Data (continued) The following tables set forth business segment information: MOSFETs Diodes Components Resistors Inductors Capacitors Optoelectronic Corporate / Other Total Year ended December 31, 2023: Net revenues Segment Operating Income Depreciation expense Capital expenditures $ 778,754 195,793 35,965 132,543 Total Assets as of December 31, $ $ 690,540 153,462 44,904 62,185 243,146 42,963 16,496 23,228 $ 843,472 209,425 39,781 67,085 $ 347,392 99,684 14,963 10,767 $ 498,741 104,985 14,269 21,914 $ - - 8,079 11,688 $ 3,402,045 $ 806,312 $ 174,457 $ 329,410 2023: $ 702,299 $ 852,703 $ 352,984 $ 946,585 $ 365,111 $ 459,653 $ 560,588 $ 4,239,923 Year ended December 31, 2022: Net revenues Segment Operating Income Depreciation expense Capital expenditures $ 762,260 228,692 30,551 90,297 Total Assets as of December 31, $ $ 765,220 176,422 40,014 69,126 296,384 85,456 14,065 27,776 $ 832,806 235,259 34,903 76,702 $ 331,086 93,453 14,927 35,102 $ 509,645 104,810 14,286 15,214 $ - $ 3,497,401 (6,661) $ 917,431 $ 155,864 7,118 $ 325,308 11,091 2022: $ 672,048 $ 814,017 $ 385,388 $ 861,870 $ 322,893 $ 496,924 $ 312,513 $ 3,865,653 Year ended December 31, 2021: Net revenues Segment Operating Income Depreciation expense Capital expenditures $ 667,998 148,652 30,257 44,227 $ $ 709,416 145,814 40,406 45,772 302,714 82,378 14,585 25,068 $ 752,554 190,953 34,344 57,729 $ 335,638 97,482 14,448 24,377 $ 472,167 85,342 17,129 13,099 $ - - 8,078 8,100 $ 3,240,487 $ 750,621 $ 159,247 $ 218,372 Total Assets as of December 31, 2021: ________________ $ 503,937 $ 815,751 $ 377,815 $ 783,390 $ 355,353 $ 496,129 $ 210,882 $ 3,543,257 Years ended December 31, 2022 2023 2021 Reconciliation: Segment Operating Income Impact of COVID-19 Pandemic on Selling, General, and Administrative Expenses Unallocated Selling, General, and Administrative Expenses Consolidated Operating Income (Loss) Unallocated Other Income (Expense) Consolidated Income Before Taxes $ $ $ 806,312 - (320,168) 486,144 (18,742) 467,402 $ $ $ 917,431 $ (546) (301,399) 615,486 (21,981) 593,505 $ $ 750,621 - (282,819) 467,802 (33,192) 434,610 The Company has a broad line of products that it sells to OEMs, EMS companies, and independent distributors. The distribution of sales by customer type is shown below: Distributors OEMs EMS companies Years Ended December 31, 2022 2023 2021 $ $ 1,798,291 1,378,065 225,689 3,402,045 $ $ 2,019,842 1,229,114 248,445 3,497,401 $ $ 1,902,499 1,138,569 199,419 3,240,487 F-45 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 15 – Segment and Geographic Data (continued) Net revenues were attributable to customers in the following regions: Asia Europe Americas Years Ended December 31, 2022 2023 2021 $ $ 1,255,563 1,255,652 890,830 3,402,045 $ $ 1,347,893 1,146,898 1,002,610 3,497,401 $ $ 1,392,267 1,072,025 776,195 3,240,487 The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, military and aerospace, medical, power supplies, telecommunications, consumer products, and computing end markets. Sales by end market are presented below: Industrial Automotive Military and Aerospace Medical Other* Years Ended December 31, 2022 2023 2021 $ $ 1,216,078 1,202,923 271,871 152,611 558,562 3,402,045 $ $ 1,377,043 1,067,499 215,078 133,808 703,973 3,497,401 $ $ 1,269,150 994,039 170,484 130,126 676,688 3,240,487 *Power supplies, telecommunications, consumer products, and computing The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area: United States Germany Other Europe Israel Asia The following table summarizes property and equipment based on physical location: United States Germany Other Europe Israel People's Republic of China Republic of China (Taiwan) Other Asia Other Years ended December 31, 2022 2023 2021 $ $ 879,734 1,076,812 151,160 29,560 1,264,779 3,402,045 $ $ 974,503 1,005,796 142,454 25,844 1,348,804 3,497,401 $ $ 750,862 976,907 134,773 20,362 1,357,583 3,240,487 December 31, 2023 2022 $ $ 162,428 $ 305,504 148,646 98,800 250,209 207,515 108,055 13,489 1,294,646 $ 144,112 229,449 118,672 87,174 250,669 192,456 98,332 9,595 1,130,459 F-46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 16 – Earnings Per Share Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of restricted stock units (see Note 12), convertible debt instruments (see Note 6), and other potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders (shares in thousands): Numerator: Net earnings attributable to Vishay stockholders Denominator: Denominator for basic earnings per share: Weighted average shares Outstanding phantom stock units Adjusted weighted average shares - basic Effect of dilutive securities: Restricted stock units Convertible debt instruments Dilutive potential common shares Denominator for diluted earnings per share: Adjusted weighted average shares - diluted Years ended December 31, 2022 2023 2021 $ 323,820 $ 428,810 $ 297,970 139,318 129 139,447 143,176 223 143,399 144,796 209 145,005 799 - 799 516 - 516 488 2 490 140,246 143,915 145,495 Basic earnings per share attributable to Vishay stockholders Diluted earnings per share attributable to Vishay stockholders $ $ 2.32 $ 2.99 $ 2.31 $ 2.98 $ 2.05 2.05 Diluted earnings per share for the years presented do not reflect the following weighted average potential common shares, as the effect would be antidilutive (in thousands): Restricted stock units Years ended December 31, 2022 2023 2021 82 251 279 If the average market price of Vishay common stock is less than the effective conversion prices of the convertible senior notes due 2025 and due 2030, respectively, no shares are included in the diluted earnings per share computation for the convertible senior notes due 2025 and due 2030. Upon Vishay exercising its existing right to legally amend the indenture governing the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock. Pursuant to the indenture governing the convertible senior notes due 2030, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in cash and/or common stock. Accordingly, the convertible senior notes due 2025 and due 2030 are not anti-dilutive when the average market price of Vishay common stock is less than the respective effective conversion prices of the convertible senior notes due 2025 and due 2030. In connection with the issuance of the convertible senior notes due 2030, the Company entered into capped call transactions (see Note 6), which were not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive. The capped calls are intended to reduce the potential dilution to the Company's common stock in the event that at the time of conversion of the convertible senior notes due 2030 the Company's common stock price exceeds the conversion price of the convertible senior notes due 2030. F-47 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 17 – Additional Cash Flow Information Changes in operating assets and liabilities, net of effects of businesses acquired, consist of the following: Accounts receivable Inventories Prepaid expenses and other current assets Accounts payable Other current liabilities Net change in operating assets and liabilities Years ended December 31, 2022 2023 2021 $ $ (3,717) $ (58,758) (42,005) 743 (58,120) (161,857) $ (26,696) $ (119,595) (11,380) (61,665) 77,223 (142,113) $ (67,707) (121,492) (35,377) 61,481 79,683 (83,412) F-48 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 18 – Fair Value Measurements The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis: December 31, 2023 Assets: Assets held in rabbi trusts Available for sale securities Non - U.S. Defined Benefit Pension Plan Assets: Equity securities Fixed income securities Cash Liability: MaxPower acquisition contingent consideration December 31, 2022 Assets: Assets held in rabbi trusts Available for sale securities Precious metals Non - U.S. Defined Benefit Pension Plan Assets: Equity securities Fixed income securities Cash Liability: MaxPower acquisition contingent consideration $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Total Fair Value Level 1 Level 2 Level 3 50,378 4,115 $ 24,343 4,115 $ 26,035 - $ 3,925 21,232 38,130 117,780 $ 3,925 21,232 38,130 91,745 938 - $ 50,173 3,677 1,252 5,876 18,406 41,338 120,722 $ 27,168 3,677 1,252 5,876 18,406 41,338 97,717 $ $ $ - - - - - - - - - 26,035 $ - 938 $ 23,005 - - - - - 23,005 $ $ - - - - - - - 6,870 - - 6,870 There have been no changes in the classification of any financial instruments within the fair value hierarchy in the periods presented. The Company maintains non-qualified trusts, referred to as “rabbi” trusts, to fund payments under deferred compensation and non-qualified pension plans. Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale, and company-owned life insurance assets. The marketable securities held in the rabbi trusts are valued using quoted market prices on the last business day of the year. The company-owned life insurance assets are valued in consultation with the Company’s insurance brokers using the value of underlying assets of the insurance contracts. The fair value measurement of the marketable securities held in the rabbi trust is considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy. The Company maintains defined benefit retirement plans in certain of its non-U.S. subsidiaries. The assets of the plans are measured at fair value. Equity securities held by the non-U.S. defined benefit retirement plans consist of equity securities that are valued based on quoted market prices on the last business day of the year. The fair value measurement of the equity securities is considered a Level 1 measurement within the fair value hierarchy. Fixed income securities held by the non-U.S. defined benefit retirement plans consist of government bonds in the Philippines and India and corporate notes that are valued based on quoted market prices on the last business day of the year. The fair value measurement of the fixed income securities is considered a Level 1 measurement within the fair value hierarchy. Cash held by the non-U.S. defined benefit retirement plans consists of demand deposits on account in various financial institutions to fund current benefit payments. The carrying amount of the cash approximates its fair value. The Company holds investments in debt securities that are intended to fund a portion of its pension and other postretirement benefit obligations outside of the U.S. The investments are valued based on quoted market prices on the last business day of the year. The fair value measurement of the investments is considered a Level 1 measurement within the fair value hierarchy. F-49 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 18 – Fair Value Measurements (continued) From time to time, the Company purchases precious metals bullion in excess of its immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations. The metals are valued based on quoted market prices on the last business day of the period. The fair value measurement of the metals are considered a Level 1 measurement within the fair value hierarchy. The inventory of precious metals bullion in excess of its immediate manufacturing needs was not material at December 31, 2023. The Company may be required to make certain contingent consideration payments to non-employee equity holders of MaxPower pursuant to the acquisition agreement, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. One of the contingencies was resolved in the fourth quarter of 2023, which resulted in no additional payments to the former employees and equity holders of MaxPower. The fair value of these contingent payments is determined by estimating the net present value of the expected cash flows based on the probability of expected payments. The fair value measurement of the contingent consideration payments is considered a Level 3 measurement within the fair value hierarchy. The fair value of the long-term debt, excluding the deferred financing costs, at December 31, 2023 and 2022 is approximately $836,200 and $491,100, respectively, compared to its carrying value, excluding the deferred financing costs, of $845,102 and $507,344, respectively. The Company estimates the fair value of its long-term debt using a combination of quoted market prices for similar financing arrangements and expected future payments discounted at risk- adjusted rates, which are considered level 2 inputs. At 2023 and 2022, the Company’s short-term investments were comprised of time deposits with financial institutions that have maturities that exceed 90 days from the date of acquisition; however they all mature within one year from the respective balance sheet dates. The Company's short-term investments are accounted for as held-to-maturity debt instruments, at amortized cost, which approximates their fair value. The investments are funded with excess cash not expected to be needed for operations prior to maturity; therefore, the Company believes it has the intent and ability to hold the short-term investments until maturity. At each reporting date, the Company performs an evaluation to determine if any unrealized losses are other-than-temporary. No other-than-temporary impairments have been recognized on these securities, and there are no unrecognized holding gains or losses for these securities during the periods presented. There have been no transfers to or from the held-to-maturity classification. All decreases in the account balance are due to returns of principal at the securities’ maturity dates. Interest on the securities is recognized as interest income when earned. At December 31, 2023 and 2022, the Company’s cash and cash equivalents were comprised of demand deposits, time deposits with maturities of three months or less when purchased, and money market funds. The Company estimates the fair value of its cash, cash equivalents, and short-term investments using level 2 inputs. Based on the current interest rates for similar investments with comparable credit risk and time to maturity, the fair value of the Company's cash, cash equivalents, and held-to-maturity short-term investments approximate the carrying amounts reported in the accompanying consolidated balance sheets. The Company’s financial instruments also include accounts receivable and accounts payable. The carrying amounts for these financial instruments reported in the accompanying consolidated balance sheets approximate their fair values. F-50 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 19 – Related Party Transactions Vishay Precision Group, Inc. On July 6, 2010, Vishay completed the spin-off of its measurements and foil resistors businesses into an independent, publicly-traded company, Vishay Precision Group, Inc. Vishay’s common stockholders received 1 share of VPG common stock for every 14 shares of Vishay common stock they held on the record date, June 25, 2010, and Vishay’s Class B common stockholders received 1 share of VPG Class B common stock for every 14 shares of Vishay Class B common stock they held on the record date. Following the spin-off, VPG is an independent company and Vishay retains no ownership interest. Relationship with VPG after Spin-off Following the spin-off, VPG and Vishay operate separately, each as independent public companies. Vishay has no ownership interest in VPG. However, Ruta Zandman solely or on a shared basis with Marc Zandman and Ziv Shoshani, all of whom are members of Vishay's Board of Directors, control a large portion of the voting power of both Vishay and VPG. Marc Zandman, Vishay’s Executive Chairman of the Board and an executive officer of Vishay, serves on the Board of Directors of VPG. Ziv Shoshani, CEO of VPG, serves as a director of Vishay. Additionally, Timothy V. Talbert, a member of Vishay’s Board of Directors is also a member of the Board of Directors of VPG. In connection with the completion of the spin-off, Vishay and its subsidiaries entered into several agreements with VPG and its subsidiaries that govern the relationship of the parties following the spin-off. Among the agreements entered into with VPG and its subsidiaries were a transition services agreement, several lease agreements, and supply agreements. None of the agreements have had nor are expected to have a material impact on Vishay’s financial position, results of operations, or liquidity. Some of these agreements have expired and have not been renewed. Vishay also entered into a trademark license agreement with VPG pursuant to which Vishay granted VPG the license to use certain trademarks, service marks, logos, trade names, entity names, and domain names which include the term “Vishay.” The license granted VPG the limited, exclusive, royalty-free right and license to use certain marks and names incorporating the term “Vishay” in connection with the design, development, manufacture, marketing, provision and performance of certain VPG products that do not compete with any products within Vishay’s product range as constituted immediately following the separation and certain services provided in connection with the products. The license cannot be terminated except as a result of willful misconduct or liquidation bankruptcy of VPG. F-51 SUBSIDIARIES OF THE REGISTRANT Exhibit 21 Note: Names of Subsidiaries are indented under name of Parent. Subsidiaries are wholly owned unless otherwise noted. (Directors' or other shares required by statute in foreign jurisdictions and totaling less than 1% of equity are omitted.) Vishay Americas, Inc. Vishay Americas do Brasil, LTDA Vishay Insurance, DAC Vishay France Holdings SAS Vishay MCB Industrie S.A.S. Vishay Dale Electronics, LLC Electronica Dale de Mexico S.A. de C.V. Vishay HiRel Systems LLC Vishay HiRel Systems International, LLC Vishay Sprague, Inc. Sprague Electric of Canada Limited Siliconix incorporated Vishay Siliconix, LLC Siliconix Semiconductor, LLC Siliconix Electronic Co. Ltd. Vishay Siliconix Ireland Ltd. Shanghai Simconix Electronic Company Ltd. Siliconix Technology C.V. Vishay Semiconductor Italiana S.p.A. Vishay Siliconix Singapore Pte. Ltd. Vishay Semiconductor India Pvt. Ltd. Siliconix Singapore Pte Ltd MaxPower Semiconductor, Inc. MaxPower Semiconductor U.K., Ltd. Vishay GSI, Inc. Vishay GSI Holdings, LLC Vishay General Semiconductor, L.P. Vishay General Semiconductor, LLC Vishay General Semiconductor of Taiwan, Ltd. Vishay Capella Microsystems (Taiwan) Limited Vishay Asia GS Investments Pte., Ltd. ECOMAL Nederland BV Vishay BCcomponents Holdings Ltd. Vishay BCcomponents B.V. Vishay Capacitors Belgium NV Vishay Resistors Belgium BV Vishay Components India Pvt. Ltd Vishay BCcomponents Hong Kong Ltd. Vishay Hong Kong Ltd. Vishay Intertechnology Asia Pte Ltd. Vishay Japan Co. Ltd. Vishay Korea Co. Ltd. Vishay (Taiwan) Ltd. Vishay Malaysia Sdn. Bhd. Vishay Dutch Holdings B.V. Delaware Brazil Ireland France France Delaware Mexico Delaware Delaware Delaware Canada Delaware Delaware Delaware The Republic of China (Taiwan) Ireland China Netherlands Italy Singapore India Singapore Delaware United Kingdom Delaware Delaware Cayman Islands Delaware The Republic of China (Taiwan) The Republic of China (Taiwan) Singapore Netherlands Delaware Netherlands Belgium Belgium India Hong Kong Hong Kong Singapore Japan Korea The Republic of China (Taiwan) Malaysia Netherlands (a) (b) (c) Subsidiaries of the Registrant (continued) Vishay Israel Limited Z.T.R. Electronics Ltd. ECOMAL Israel Ltd. Vishay Polytech Co. Ltd. Vishay La Laguna S. DE R.L. DE C.V. Vishay Europe GmbH Vishay Europe Sales GmbH Vishay BCcomponents Austria GmbH Vishay Semiconductor Ges.mbH Vishay Electronic GmbH Vishay Siliconix Itzehoe GmbH Vishay Electronica Portugal Lda. ECOMAL Europe GmbH ECOMAL Sweden AB ECOMAL Schweiz A.G. ECOMAL Austria GmbH Vishay Components, S.A. ECOMAL Iberia S.A.U. ECOMAL Belgium BV ECOMAL Ceska republika S.r.O. ECOMAL Denmark A/S ECOMAL Finland OY ECOMAL France S.A.S. ECOMAL UK Ltd. Vishay Ltd. ECOMAL Italy s.r.l. ECOMAL Elektronske Komponente d.o.o. Vishay Electronic SPOL SRO Ecomal Poland Sp. Z.o.o. Ecomal Hungary Kft. Vishay S.A. Ultronix, Inc. Vishay Semiconductor GmbH Vishay (Phils.) Inc. Siliconix Philippines, Inc. Vishay Asia Semiconductor Investments Pte. Ltd. Vishay Singapore Pte. Ltd. Vishay Semiconductor Shanghai Co., Ltd. Vishay General Semiconductor (China) Co., Ltd. Vishay Micro-Electronics (Xi'an) Co., Ltd. Vishay China Co. Ltd. Vishay HiRel Systems Zhuhai Electronics Co Ltd Vishay Components (Huizhou) Co. Ltd. Vishay Hungary Elektronikai KFT Vishay Semiconductor Malaysia Sdn Bhd Vishay BCcomponents Beyschlag GmbH Israel Israel Israel Japan Mexico Germany Germany Austria Austria Germany Germany Portugal Germany Sweden Switzerland Austria Spain Spain Belgium Czech Republic Denmark Finland France United Kingdom United Kingdom Italy Slovenia Czech Republic Poland Hungary France Delaware Germany Philippines Philippines Singapore Singapore China China China China China China Hungary Malaysia Germany (d) (e) (f) (g) (h) (i) (j) Subsidiaries of the Registrant (continued) (a) - Registrant's indirect ownership percentage in Siliconix Technology C.V. is 100%; 89% is owned by its wholly owned subsidiary Siliconix Incorporated, 10% is owned by its indirectly wholly owned subsidiary Siliconix Semiconductor, LLC, and 1% is owned by its indirect wholly owned subsidiary Vishay Siliconix LLC. (b) - Registrant's indirect ownership percentage in Vishay General Semiconductor, L.P. is 100%; 1% is owned by its indirectly wholly owned subsidiary Vishay GSI Holdings, LLC, and 99% is owned by its wholly owned subsidiary Vishay GSI, Inc. (c) - Registrant's indirect ownership percentage in Vishay Components India Pvt. Ltd. is 100%; 69% is owned directly and 31% is owned by its indirectly wholly owned subsidiary Vishay BCcomponents B.V. (d) - Registrant's indirect ownership percentage in Ecomal Israel Ltd. is 66.7%. (e) - Registrant's indirect ownership percentage in Vishay La Laguna S. DE R.L. DE C.V. is 100%; 99% is owned by its wholly owned subsidiary Vishay Israel (f) - Limited and 1% is owned by its indirectly wholly owned subsidiary Z.T.R. Electronics Ltd. Registrant's indirect ownership percentage in Vishay Europe GmbH is 100%; over 99.9% is owned directly or indirectly by its wholly owned subsidiary Vishay Israel Limited and its affiliates; and less than 0.1% is owned directly. (g) - Registrant's indirect ownership percentage in Vishay Electronica Portugal Lda. is 100%; 70% is owned by its indirectly wholly owned subsidiary Vishay Europe GmbH and 30% is owned by its indirectly wholly owned subsidiary Vishay Electronic GmbH. (h) - Registrant's indirect ownership percentage in Vishay S.A. is 99.9%. (i) - Registrant's indirect ownership percentage in Vishay Singapore Pte. Ltd. is 100%, 48% is owned by its indirectly wholly owned subsidiary Vishay Asia Semiconductor Investments Pte. Ltd., 26% is owned by its indirectly wholly owned subsidiary Vishay Asia Semiconductor GS Investments Pte. Ltd., and 26% is owned by its indirectly wholly owned subsidiary Siliconix Technology C.V. Registrant's indirect ownership percentage in Vishay Components (Huizhou) Co. Ltd. is 100%; 36% is owned by its indirectly wholly owned subsidiary Vishay Hong Kong Ltd. and 64% is owned by its indirectly wholly owned subsidiary Vishay China Co. Ltd. (j) - Consent of Independent Registered Public Accounting Firm Exhibit 23.1 We consent to the incorporation by reference in the following Registration Statements: 1) Registration Statement (Form S-8 No. 333-144466) pertaining to the 2007 Stock Incentive Program of Vishay Intertechnology, Inc., 2) Registration Statement (Form S-8 No. 333-178895) pertaining to the Deferred Compensation Plan of Vishay Intertechnology, Inc., 3) Registration Statement (Form S-8 No. 333-196143) pertaining to the 2007 Stock Incentive Program of Vishay Intertechnology, Inc., and 4) Registration Statement (Form S-8 No. 333-272140) pertaining to the 2023 Long-Term Incentive Plan of Vishay Intertechnology, Inc. of our reports dated February 16, 2024, with respect to the consolidated financial statements of Vishay Intertechnology, Inc. and the effectiveness of internal control over financial reporting of Vishay Intertechnology, Inc. included in this Annual Report (Form 10-K) of Vishay Intertechnology, Inc. for the year ended December 31, 2023. /s/ Ernst & Young LLP Philadelphia, Pennsylvania February 16, 2024 I, Joel Smejkal, certify that: CERTIFICATIONS 1. I have reviewed this Annual Report on Form 10-K of Vishay Intertechnology, Inc.; Exhibit 31.1 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 16, 2024 /s/ Joel Smejkal Joel Smejkal Chief Executive Officer I, Lori Lipcaman, certify that: CERTIFICATIONS 1. I have reviewed this Annual Report on Form 10-K of Vishay Intertechnology, Inc.; Exhibit 31.2 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 16, 2024 /s/ Lori Lipcaman Lori Lipcaman Chief Financial Officer CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.1 In connection with the Annual Report of Vishay Intertechnology, Inc. (the "Company") on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Joel Smejkal, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Joel Smejkal Joel Smejkal Chief Executive Officer February 16, 2024 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.2 In connection with the Annual Report of Vishay Intertechnology, Inc. (the "Company") on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lori Lipcaman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Lori Lipcaman Lori Lipcaman Chief Financial Officer February 16, 2024 [This page intentionally left blank] Board of Directors Marc Zandman Executive Chairman of the Board of Directors Chief Business Development Officer Vishay Intertechnology, Inc. Dr. Renee Booth President Chief Executive Officer Leadership Solutions, Inc. Michael J. Cody Retired Vice President of Corporate Development Raytheon Company Dr. Michiko Kurahashi Digital Marketing Consultant previously Chief Marketing Officer at AXIS Capital Dr. Abraham Ludomirski Founder and Managing Director of Vitalife Fund, a venture capital company specializing in high tech electronic medical devices John Malvisi Retired Senior Partner Deloitte & Touche LLP’s audit practice Ziv Shoshani President Chief Executive Officer Vishay Precision Group, Inc. Joel Smejkal President Chief Executive Officer Vishay Intertechnology, Inc. Timothy V. Talbert Retired Senior Vice President Credit and Originations Lease Corporation of America Retired President LCA Bank Corporation Jeffrey H. Vanneste Retired Chief Financial Officer Lear Corporation Term expires at the 2024 Annual Meeting. Ruta Zandman Private Stockholder Vishay Intertechnology, Inc. Raanan Zilberman Former President and Chief Executive Officer of multiple international companies Honorary Executive Chairman of the Board Dr. Felix Zandman (Deceased June 4, 2011) Stockholder Assistance Duplicate Mailings For information about stock transfers, dividend payments, address changes, account consolidation, registration changes, lost stock certificates, and Form 1099, please contact the Company’s Transfer Agent and Registrar. Transfer Agent and Registrar Computershare Inc. Website: www.computershare.com Telephone inquiries: 1-800-736-3001, (U.S.) 1-781-575-3100, (non-U.S.) E-mail inquiries: web.queries@computershare.com Written requests: By Mail: Computershare, Inc. P.O. Box 43078 Providence RI 02940-3078 Common Stock Ticker symbol: VSH The common stock is listed and principally traded on the New York Stock Exchange. If you receive more than one Annual Report and Proxy Statement and wish to help us reduce costs by discontinuing multiple mailings, please contact our Transfer Agent Computershare Inc. Electronic Proxy Materials You can receive Vishay Intertechnology’s Annual Report and proxy materials electronically, which will give you immediate access to these materials, and will save the Company printing and mailing costs. If you are a registered holder (you own the stock in your name), and wish to receive your proxy materials electronically, please go to www.icsdelivery.com/vsh. If you are a street holder (you own this stock through a bank or broker), please contact your broker and ask for electronic delivery of Vishay Intertechnology’s proxy materials. CORPORATE INFORMATION Executive Officers Marc Zandman Executive Chairman of the Board of Directors Chief Business Development Officer Joel Smejkal President Chief Executive Officer Jeff Webster Executive Vice President Chief Operating Officer David McConnell Executive Vice President Chief Financial Officer Roy Shoshani Executive Vice President Chief Technical Officer Michael O’Sullivan Executive Vice President Chief Administrative and Legal Officer Peter Henrici Executive Vice President Corporate Development Corporate Office Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2120 Phone: 610.644.1300 www.vishay.com Annual Meeting May 21st, 2024 at 9 AM ET The annual meeting will be conducted completely online via the internet. Stockholders may attend and participate in the meeting by visiting www. virtualshareholdermeeting.com/VSH2024. 2023 Annual Report Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2120 United States 610.644.1300 www.vishay.com © Copyright 2024 Vishay Intertechnology, Inc. ® Registered trademarks of Vishay Intertechnology, Inc., and other parties. All rights reserved. 

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