Vishay Intertechnology, Inc.

Richard N. Grubb - Executive Vice President, Chief Financial Officer and Treasurer William M.

Clancy - Senior Vice President and Corporate Secretary Dr. Gerald Paul - President and Chief Executive Officer Dr.

Felix Zandman - Founder and Chairman, Chief Technical Officer and Chief Business Development Officer

Mark Moskowitz – JP Morgan Steve Smigie - Raymond James Andrew Huang - American Technology Research Shawn Harrison - Longbow Research Kevin Kessel - Bear Stearns Matt Sheerin - Thomas Weisel Partners Jim Suva - Citigroup

Thank you very much. Good morning everyone and thank you for calling in for today’s conference call.

On line with me today are Dr. Gerald Paul, Vishay’s CEO; and Dr.

Felix Zandman, Vishay’s Executive Chairman, Chief Technical and Business Development Officer. Before I start, Bill Clancy, our Corporate Controller, will read our customary opening statement.

Bill?

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

For a discussion of factors that could cause results to differ, please see today’s press release and Vishay’s Form 10-K and Form 10-Q filings with the SEC.

As usual, I will make some summary comments and Dr. Paul will add a more detailed evaluation of the quarter and of year.

And finally, Dr. Zandman will update our R&D and acquisition activity.

As announced today in our press release, Vishay reported $0.19 operating earnings per share, as compared to $0.19 for last year’s fourth quarter and $0.25 for the third quarter of 2007. The operational results of the fourth quarter of 2007 and the last 9-months of 2007, exclude the automotive business units acquired as part of the IRPCS business in April of 2007.

The company announced its intention to sell the business back in June and is in the process of meetings with interested parties. This transaction is included in the financial statements as discontinued operations.

The reported GAAP earnings per share include restructuring and severance costs of $2.8 million, a contract termination charge of $18.9 million, which was partially offset by a gain on the sale of a building of $3.1 million. These items and their related tax consequences, plus additional tax expense for changes in uncertain tax positions and valuation allowances totaling $5.9 million, had a negative $0.13 per share effect against GAAP operating earnings.

Revenues for the fourth quarter of $730 million were approximately 15% higher than last year’s fourth quarter and relatively the same as compared to the third quarter of this year. The increase in revenues compared to last year’s fourth quarter is primarily due to the IRPCS acquisition.

Revenues by segment are: semiconductors comprised 53% of our revenues and our passives represent 47% of our revenue. Consolidated gross margins for the quarter were 22.9% as compared to 24% for the immediately preceding quarter.

Gross margins by segment for the quarter were: semiconductors, 22.5% compared to 23.3% in the last quarter; passive products were 23.3% compared to 24.8% in the last quarter. As I said before, Dr.

Paul will discuss the operations in much more detail a little bit later. Selling, general and administrative expenses for this quarter were 15.5% of revenues as compared to 15.2% for the third quarter of 2007.

Other income consists mainly of interest income and foreign exchange loss. The effective adjusted tax rate for the year now is at 24% as opposed to 22% that we were projecting for the year back during the first nine months of this year.

And we now estimate that for 2008, 24% will be the tax rate that will be used. Capital expenditures for the quarter were $92 million and $201 million for the year.

Depreciation and amortization for the quarter was $57 million. And total head count at quarter end was 28,000 employees of which 75% are in low-cost areas.

Some other key amounts; cash and short-term investments at quarter end totaled $537 million. Total debt, substantially all of which are convertibles equals $607 million.

Inventory at quarter end was $555 million and working capital at the end of the year was $1.2 billion. Bookings for the quarter were $699 million for a book-to-bill ratio of 0.96 to 1 for the fourth quarter.

Backlog at year-end is $647 million. Cash generated from operations was $143 million for the quarter and $354 million for the full year.

Free cash flow on a consolidated basis was $55 million for the fourth quarter and for the year $160 million. And as announced in our press release, we expect the first quarter revenues to be in the $720-740 million range.

And again, we estimate the tax rate for 2008 to be at 24%. Thank you and Dr.

Paul will now elaborate on these numbers.

Thank you Dick, good morning everybody. Now, as you’ve heard from Dick, the fourth quarter turned out to be not satisfactory.

On the other hand, 2007 was another successful year for Vishay. In fact, it was one of our best years in terms of cash generation and the adjusted earnings per share for 2007 were in the range of 2006 which has been the second best year ever.

We also integrated this year, successfully, new discrete lines from International Rectifier complementing our product portfolio. Let me start out to look at the economic environment, which we have seen in the quarter.

Quarter four ‘07 principally showed the continuation of a friendly economic climate worldwide; some slowdown of orders in consumer laptops and mobile phones represents in our conviction of seasonal effect. Industrial markets, aviation, military and space, as well as automotive in Europe remained strong.

Inventories at distribution have grown by 5% but inventory turns remained reasonable. Worldwide we have seen that our distributors 3.8 turns, 3.0 turns in the Americas, 3.5 turns in Europe and 4.9 turns in Asia which is down from 5.9 turns last quarter but if you compare to prior year, it’s on the same level as in the prior year.

Orders from Asian distributors weakened through the quarter, some correction seems to take place in view of a weaker POS of our distributors. The lead times remained short between 4 to 8 weeks and we see increasing price pressure in our negotiations.

I am aware of the fact that there is some broader uncertainty about the mid-term economic future but looking into our first quarter this looks solid for Vishay. Talking about the business development in the fourth quarter, Vishay’s sales were in line with our guidance, we achieved sales of $730 million in the quarter versus $730 in the prior quarter and $636 million in the prior year.

The IR and PM Onboard acquisitions contributed $64 million in the quarter. Excluding exchange rate effects, sales versus prior quarter were down by $12 million and vis-à-vis prior year on an apples-to-apples basis, sales excluding acquisitions and excluding the exchange rate effects were slightly above prior year.

Book-to-bill in the quarter was at 0.96%, some more details: 0.92% for distribution; 1.0% for OEMs, 0.94% for actives, 0.99% for passives and regional splits; 0.96% for the Americas; 1.02% for Europe; and 0.91% for Asia. You see the weak areas where distribution on one side and Asia on the other, I commented on it before.

The backlog remained at a comfortable level of 2.7 months. We still see low price decline in general, Vishay, in total, at minus 1.2% versus prior quarter, minus 3.5% versus prior year.

The actives down by 1.8% versus prior quarter and 5.7% down versus prior year, passives continued to show hardly any price decline 0.5% versus prior quarter and 1.4% versus prior year. Let me talk about the results of the fourth quarter and reconcile them vis-à-vis the prior quarter, the third quarter.

Based on the same sales level, as I said, $12 million excluding exchange rate impacts, the adjusted operating margin decreased by $10 million from $65 million to $55 million. The main elements were ASP decline which had the negative impact of $9 million, inventory impacts of plus $3 million and the exchange rate impact of minus $3 million, not really related to euro/dollar, but related primarily to the Israel, shekel; the Hungarian, forint and the Czech, koruna, which were stronger than the dollar than they have been before.

Some remarks on the quarter, as I said in the beginning, quarter four has not been a good quarter for Vishay. It was below our guidance.

Quite a few negative indicatives have burdened the quarter. We have seen increases in material prices, they continued to hurt us, and there have been production inefficiency, mostly in connection with production moves.

In general, we also had expected fuller quarter and improved product mix, especially at Siliconix, and this did not come through yet. If we compared the results of the fourth quarter through the fourth quarter of 2006, we can see that based on $31 million higher sales for the core business that is without acquisitions, actually $7 million higher excluding exchange rate impacts, the adjusted operating margin increased by $1 million from $51 to $52 million.

Main elements again, volume was positive with $16 million, selling prices negative with $24 million. The costs were better by $12 million, and the exchange rate had the negative impact of $3 million on the reserves.

The acquisitions contributed $64 million in sales, and $3 million in operating margin. Now, we can also compare the years, 2007 vis-à-vis 2006.

Based on $66 million more sales, just $5 million lower, even excluding the exchange rate impact, the adjusted operating margin of the core business decreased by $35 million from $277 million to $242 million. The main elements, year-over-year were an ASP decline of $49 million, positive volume impact of $27 million, inventory-related impact negative $9 million, this related primarily to the reduction of inventories this year and last year, and the negative exchange rate impact of $4 million.

So what you see really is that the volume increase in 2007, did not balance the ASP decline. And I would also like to remark that our costs have been negatively impacted by metals and silicon substantially by $20 million year-over-year.

Acquisitions contributed $186 million in sales and $11 million in profits. Let me summarize some highlights of the operations.

In quarter four, the manufacturing inventory turns improved further to 3.8%. In 2007, they are at 3.5% as compared to 3.3% in 2006.

We see a continuous improvement there. Excluding exchange rate effects, inventories in the quarter reduced by $12 million.

Comments on inventory always include tantalum classified as other assets, which now is at $36 million down from $44 million end of Q3 and from $65 million end of ‘06. Capital spending in the quarter, as Dick said, was $94 million resulting in $201 million for the total year 2007, very close to our expectations.

This includes acquisitions and compares to $183 million in 2006. Just to remark, more than 50% of the capital that has been spent in 2007 was spent for expansion projects predominately for discretes.

The overall employment, but also the share of employment, in high labor countries, was stable. We have seen in the fourth quarter, a good capacity load in virtually all commodity product lines, as I said, the lead times are relatively short, between four and eight weeks.

2007 for Vishay was an excellent year for the generation of cash. We generated 145 million cash from operations in the quarter for a total of $414 million in 2007 for the core business that means without the acquisitions.

This compares to $350 million in 2006. We generated free cash in the quarter of $64 million for a total of $231 million in 2007, again for the core business without acquisitions.

This compares to $166 million in 2006, a substantial improvement which we expected to happen. Acquisitions generated minus $61 million in cash from operations respectively minus $70 million free cash in 2007, but please be reminded that we bought IR without the receivables.

Talking about the IR integration and its status, just to remind you, we have successfully integrated in 2007 a complementary business with discretes generating annualized sales of $240 million. We are in negotiations to divest the IR automotive systems business.

It’s not strategic to Vishay and there are also no potential synergies. The profitability in 2007 of the acquisition without automotive was 7%, which of course is far below still of our expectations of 18% operating margin on an incremental basis.

We do expect major improvements of profitability in the context of moving out manufacturing from IR facilities into owned facilities, respectively foundries. This will be completed step-by-step until the year end of ‘08.

Presently, only 10% of packaging and no front-end has been moved. By middle of ‘08, just to give you a feeling about the timing, approximately 50% of the front-end and back-end will be moved and the major improvements of the results are expected in the second half.

We continued to be on the target concerning the profitability in the first quarter of ‘09 also based on some sales growth, which we see. Let me come to our business of resistors and inductors.

It’s a healthy business and we see the business in a normal cycle. Sales in the quarter were $164 million, which is 2% above prior quarter and on the same level as prior year, I exclude always the exchange rate impact.

Book-to-bill in the quarter was at 0.97%, backlog at 2.5 months, gross margin in the quarter, a little disappointing, 27% of sales. The variable costs by ongoing inefficiencies primarily caused by relocations and increased metal prices.

We expect the recovery in resistors and inductors in the first quarter of the gross margin to 28% of sales. Selling prices were stable vis-à-vis prior quarter and prior year.

And the inventory turns improved to 4.5%. Capacitors, the business has stabilized after a successful implementation of new pricing strategies.

Sales in the quarter were $125 million, which is down by 1% versus prior quarter but up by 4% versus prior year. Book-to-bill in the quarter was very strong 1.06% and this was driven by our power film capacitor division.

The backlog is also strong, it’s at 3.2 month. Gross margin came out at the level of 16% of sales, which is the lower end of the expected range.

We had a worse product mix than expected. For the first quarter, we expect gross margin to improve by one to two points.

Modest price decline of capacitors continues. We have a price decline vis-à-vis prior quarter of 0.9% and vis-à-vis prior year of 2.8%.

The price decline predominately comes from tantalum caps. Manufacturing inventory turns for capacitors are at 2.4% and they will continue to improve.

The inventory reduction to quarter of $11 million mostly is due to tantalum and this reduction will continue into 2008 at about the same rate. We are adding presently capacity for film power capacitors where our manufacturing capacity is constrained.

The business with face down tantalum chips, the map technology is growing and we are in process to expand capacities in Israel. Coming to the Measurements Group, this is a principally stable business, but in quarter four ‘07 this has been influenced by singularities.

Sales came out at $54 million as compared to $48 million in prior quarter and to $42 million in the prior year. The increase versus prior year was due to the PM acquisition.

The increase versus prior quarter was due to a spike in the resale business and other one-time effects. Book-to-bill of 0.90% and backlog of two months have been influenced by the spike in sales, naturally.

Gross margin of 30% of sales has been impacted negatively by a temporary shift in product mix and additional one-time costs, like the introduction of a new IT system for planning. We expect the return to historical sales in gross margin levels in the first quarter.

Inventory turns of 3.1% in the quarter will also normalize going forward. For Measurements Group looking out into 2008, we expect based on restructuring measures, substantial improvements of profitability.

Coming to semiconductors in the start, all semiconductors without Siliconix, it’s a solid and dependable business, which currently experiences some impact of relatively high inventory and in levels at Asian distributors. Sales in the quarter were $211 million, which is 6% below prior quarter, which is partially seasonal, 14% above prior year including the IR acquisition and 3% below prior year without this acquisition.

Book-to-bill was at 0.99$, backlog was at a normal level of 2.5 months. And gross margin at 23% of sales, which is within the normal range.

Inventory turns are quite excellent for this business, 4.5%. We have seen some slightly accelerated ASP decline, 1.4% vis-à-vis prior quarter and 3.6% versus prior year.

We are happy to report that the new low-profile generation of SMD Infrared Receiver successfully has been introduced into notebooks and other portable devices. We expect nice sales growth there.

Coming to Siliconix, Siliconix is the market leader in low-voltage MOSFETs and they have increased their market share even vis-à-vis prior year. The sales in the quarter was at $175 million, down by 4% versus prior quarter.

Again the seasonal effect up by 19% versus prior year including the IR acquisition and up by 2% without this acquisition. Book-to-bill was at 0.88% also a reflection we believe of the high inventory levels at Asian distribution.

Backlog was at 2.8 month. Gross margin came out as a negative, a disappointment, declined slightly to 22% from 23%, 2% points below our expectations.

We have not seen the mixed improvements which we were counting on, and the volume was lower in the prior quarter, but we expect improvement already in the first quarter by 1 to 2 points of gross margin from a better product mix and from cost reduction. We have seen at Siliconix that the normal price decline 2.2% versus prior quarter and 8.1% versus prior year.

Inventory turns are at a very good level at Siliconix, they are running at 4.4%. Looking ahead, we see Siliconix to get back to historical gross margin levels of about 27% of sales in the course of 2008.

This is based on higher volumes, reduction of variable costs, and improved product mix. The reduction of the variable costs will come from an increase in share of 300 million cell density products in eight-inch technology as well as from the introduction of lower cost foundries.

Also of course our improvements at the IR acquisition will contribute. Let me summarize; despite a relatively disappointing fourth quarter, 2007 has been one of the most successful years in Vishay’s history.

Earnings per share of $0.95 were in the range of 2006, which I repeat, was our second best year ever. From our core business, we generated free cash of $231 million representing a 39% increase versus prior year, which already was good, but investing also significantly in expansion and cost-reduction.

Following our strategy to be a broad-liner, we continue to complete our product portfolio by integrating the PCS, Power Control Systems business of IR and PM Onboard. We introduced promising new products in discretes and in passives, which will enhance internal growth.

We look into 2008 with confidence despite some macro-economic concerns. Very substantial potential in Vishay for cost-reduction, further increased designing activities new products and service improvement.

At comparable economic conditions, 2008 is expected to be another good year for Vishay, with higher operating margin and cash generation as compared to 2007. CapEx will be down by about 15%.

For the first quarter ‘08, we guide to a sales range between $720 and $740 million at improved gross margins. Thank you very much.

Felix?

Good morning. This is Dr.

Zandman speaking. The first three quarters of 2007 were fine.

Unfortunately, the fourth quarter was less than expected, not satisfactory. The total of 2007 was similar to 2006, which was one of the best years in Vishay’s history.

In 2007, we generated $231 million free cash for the core business, a record, except for year 2000 which was a bubble, and this in spite of heavy investments, some $200 million in capital equipment, MOSFET capital, prior to the MOSFET capacity expansion. Free cash generation is a major focus at Vishay, we always look at that and always push to create as much free cash as possible.

Next quarter looks okay. We should be back on track.

IR and PM Onboard acquisitions are being integrated into Vishay as planned. We continue to look for additional acquisitions, which should be now more accessible due to lower valuations.

We continue to focus and expand our R&D and new products introduction, which in time will increase our sales and our gross profit. At this point, we don’t see the recession everyone is talking about and expect a good next quarter, thank you.

We are now open for questions.

Could you maybe just drill down a little more on the margin impact from higher materials cost. How much of this is related to the possible shortage in palladium?

It’s not really the palladium. It’s across the board in our case.

We have $20 million you may have heard, from metals and silicon year-over-year, 2007 over 2006. And we are basically impacted by coals, by copper, all kinds of materials.

Coals, titanium even, in this case it’s broad. It’s not really the palladium.

And then as far as the distribution, inventory levels, can you give us a little comfort in terms of are you still within the 6 to 7 weeks comfort zone, or are you starting to push up past the high-end? And is that because of Asia more so or Europe?

Okay, as I said, distribution inventory has come up further in the quarter by 5% approximately. But if you then look at the inventory turns, you’d find it quite normal.

Asia, somewhat low, but you know if you compare this one, with the terms which they had in the fourth quarter ‘07 with the terms a year ago, then you find it was on the same level. So it’s a seasonality in all that, but I must say inventories are relatively high, yes, but not vis-à-vis the business activity.

Can you maybe give us a kind of a range in terms of the contribution of the weakness that you cited as far as wireless versus notebook? Is wireless being a bigger driver, and is that also part of the inventory up-tick, or is it more the notebook side?

We don’t distinguish really. We feel that these businesses are just following seasonality at the moment, all these businesses.

We would not highlight at this point a weakness in these markets. It’s always like that in the fourth quarter.

And then normally it starts to get better. The best quarter is always quarter three, quarter four in these businesses, and then it starts again.

About what you’d expect operating expenses to look like in the March quarter?

We don’t see a big difference, a big change from the 15%.

I think you discussed some improvement in Siliconix in 2008. What would be the drivers of improvement there, and how much have you been impacted by major handset OEMs in terms of a little bit of weakness here?

We expect higher revenues at Siliconix next year, and I think Siliconix has a very strong position in the market, and we expect based on the activities they are going to expand this position even. And all this of course is based on the expectation of a longer business development in the market but, as I said, quarter one looks solid.

Then we see major opportunities for cost reduction on the variable cost side based on further introduction, as I said, of the $300 million sales technology in combination with 8-inch technology, which really affects the variable costs, partially in-house, partially at foundries. And we are starting with a new foundry, which offers us very competitive prices.

On top of everything, we believe that the last two quarters especially have been burdened by a relatively low-margin product mix, and we expect there also improvement.

In Siliconix, do you expect to see any customer diversification going forward? You’ve been very successful in general in the past several years there, but it seems like you had a few customers that were pretty significant.

So I was just curious if you expect some diversification?

We are driving at the moment to increase our share in automotive. You know historically Siliconix is quite strong in laptops and in mobile phones.

And since years we pushed this development to diversify more into automotive, which starts to bear fruit. So, the share in automotive of Siliconix PMOS is already around 10%, which was really not existing a few years ago, which automatically will decrease our vulnerability in that sense.

For the March quarter revenue guidance of $740 million…

$720 to $740, so really on the same level.

You talked about within the end markets where you’ve seen relative strength and then relative weakness.

We don’t see a big change in January from what we have seen in the fourth quarter. There is always the seasonality included in our considerations, but the markets we are strong in historically, industrial, automotive, especially in Europe, and for EMS, they continue strong.

We don’t see anything negative there. And historically the first quarter in Vishay is of course a strong quarter because of our presence in Europe.

Right and then for the tax rate for the rest of 2008, should we be using 24%?

Yes. 24% is what we’re estimating for 2008.

And I guess the last question on the gross margin for the March quarter you did guide up sequentially it should improve?

Yes.

But are you still feeling I guess the pain from the higher materials cost even in the March quarter?

But this is priced in so to speak.

Just a point of clarification on the variable cost reduction in Siliconix, when should we expect those savings to roll on in earnest during 2008?

As I said that we will see this is our plan and this is underlined with several concrete actions that we go quarter after quarter back to historical gross margin levels of more than 27%. It will kick during the year.

And exiting the fiscal year close to 27% gross margin?

Yes, this is our target.

And then the mix shift is that just replacing the desktop business, which negatively affected the mix in the September quarter with higher margin business?

We also expect that our IC part of the business, which is more juicy than the Power MOS will increase its share again and we have decreased there.

You have the wins in place or the designs in place for that IC business to grow.

On the analog switches in particular.

Secondly, on the operating expenses, I know there had been some talk about potentially looking to reduce those going forward. I was wondering if there was maybe any update on your thoughts in that area of just operating expenses.

I didn’t catch the beginning of the question sorry?

I know there had been some talk regarding taking down operating expenses maybe more toward in line with your peers so I was just wondering if there was any update on that plan?

We are just entering and they have designed a fixed-cost reduction program, which not only focuses on the SG&A which is manufacturing, fixed and SG&A but it’s too early to talk about it but we are in the midst of planning.

Okay so maybe next quarter call?

Yes.

Final question on the convertible debt that’s put table to you in the fall just then maybe any updates on your thoughts with that other than settling with cash in terms of offering a sweetener or anything else?

We have been discussing with certain bondholders their perception of what they think would be recommended and we have discussions that have taken place with the Board during February.

So next quarter call as well hopefully an update?

Yes sir.

Can you talk about your order rate, how it changed December versus November and what’s happened to orders in January versus December?

Now January we are close to one, slightly above one book-to-bill, and we think the quarter December was relatively weak, but this is always like that.

And was there any highlights in January; was any product area better than others?

No, it was what I would, we see as across the board, book-to-bill slightly above one.

And then just looking at Siliconix, just one other question on what happened in the quarter, you said that year-over-year growth was about 3% organically.

Two, I believe.

How do you think that compares to the market, and is there certain product segments that you think you’re stronger in, because it seems like that would not be keeping up with market growth, do you agree with that?

Looking at the market data I cannot comment on, especially on quarter four. But what we are looking at is the year as far as we know it from the market statistics and in this case, Siliconix 2007 over 2006 has gained market share, in low, but what we have to look at the segment Siliconix is active in.

And this is low-voltage Power MOS. Only now, based on the IR acquisition, we are entering also the high-voltage part of the market but Siliconix strength lies in low-voltage Power MOS and the market reports differentiate so we can really track our position.

So you think in low-volt, if we looked at low-voltage during the course of...

We gained share in 2007 versus 2006.

Dr. Paul, I just wanted to get your sense, you’ve talked about inventories here you know in terms of Vishay’s inventories and some distributors though, but in general when we look at the distribution channel it seems like their inventories are still fairly lean and I guess we don’t get as great insight on a geographic basis, but what is your sense you’re going into ‘08 general inventories for the industry and for Vishay?

I would say based on the business on the POS reached ahead in quarter four and that this is what I tried to say. The inventory is, especially in Europe and the Americas, is absolutely acceptable.

In Asia the turns came down from 5.9 according to our measurement to 4.8, which of course for Asian distribution is on the low side, no question. On the other hand, let’s also face it, if you compare the situation to the fourth quarter 2006 was the same thing.

So there is seasonality, but I don’t deny that of course the absolute level is higher than a year ago, that’s true. But again, to shout fire, if this is an English expression, I would not say, it’s adapted, as you said.

And then in terms of the margins I think you guys have said now that you expect your margins to move up sequentially in the March quarter.

We were wrong this quarter, we were wrong for quarter four, I must admit that and I tried to explain it, but yes we are guiding up.

You are guiding up for the March quarter. Now would it be fair to say that based on that statement and in the other statements that you made about much more of the expected improvements from the integration of IRF to happen in the second half of the year that Vishay is actually...

The improvement will come from the core business not necessarily from IR in the first half. In the second half we expect major improvements from IR.

Major in the second half so would it be fair to say then that there is a chance that margins could actually be improving sequentially throughout 2008?

As I said given comparable economic conditions 2007 and 8 and nobody knows that of course then we expect margins to go up what we say 8 vis-à-vis 7 and also the cash flow to go up 8 vis-à-vis 7.

And just lastly on the, I think Dr. Zandman, you made a comment that you don’t see the recession that everybody else is talking about, maybe can you just give us a sense of what are the cues that you guys look for at Vishay, in your business, that give you a sense things are definitely slow?

We don’t have visibility very deep into the market but the first quarter looks okay, looks good, strong. So we just don’t see any problem there.

Of course it could happen during the second, third quarter or after but – Gerald, you say, we don’t see the recession everybody talks about. We get saturated with that but we just don’t see it.

It just can be people. Dr.

Zandman said our visibility is one quarter and quarter one in ‘08 looks solid, very simple. Beyond this quarter, it is feeling like for everybody else.

And on the other hand when you talk to your customers, you don’t feel that people are, everybody is concerned somehow, but if you nail them down nobody is really concerned, concretely.

But then but sometimes you know I guess backlogs can always be canceled without recourse and so that, but are those sort of things that are sometimes cues or not really?

We don’t understand the blocking there for inventories and things like that. It’s not easy, it doesn’t...

We had the same in 2004 second half. Inventories were canceled.

Nothing of that nature happens now, can it happen? Yes, of course, principally always but we don’t see it.

My only report is everything looks normal except the fact that I have said the distribution inventory turns in Asia are relatively low which indicates relatively high inventory, but again, a year ago it was the same number.

And lastly just on taxes, Dick. The high tax rate in the quarter, I just missed; what caused that?

Was that a catch up?

It was, yes, we were booking at 22% for the year up to the nine months. And the shift in earnings geographically in under low-tax versus high-tax change.

So if you didn’t have that catch-up, that $0.19 would have been somewhere around $0.21 I think, others have pointed that out also. So we would expect ‘08 to be a 24% rate rather than the 22.

Just to clarify a couple of earlier questions, one on Siliconix. The book-to-bill is low; you talked about distribution in Asia and then seasonality.

But you also talked about getting incremental gross margin improvements over the next few quarters. Are we expecting gross margins to be flat to down because of seasonal drop at Siliconix, or should we still get margin improvement there in the first quarter?

Our plan goes that we improve; and I said it even directly, we expect Siliconix in the first quarter to be up by 1 to 2 points in gross margin.

And, but based on the book-to-bill, it sounds like revenue will be down seasonally, is that correct?

Not really, there’s backlog of course, one does not directly reflect the other. It’s only at the moment relatively low, but there is backlog.

So anyway, we don’t expect revenues to go down. As a matter of fact, but we still have cost reductions there.

And then on distribution you talked about Asia distribution, but it sounds like you’re seeing normal distribution trends in Europe and in North America. Of course normally distributors see strong sequential growth in Europe and North America in the first quarter.

Avnet, one of your biggest distributors, already reported earnings, and they talked about seeing strength in North America, but actually a little bit weakness seasonally, or weaker than normal trends in Europe. Can you comment in trends in each of those areas?

In America I agree. And in Europe our impression is different.

We feel Europe being strong at the moment, just strong. So maybe everybody has a different view on that, so this is our experience for Europe.

If I had any concerns, and I would look to Asia, because now seasonality has to kick in and, we’ll see. Distribution inventories in Asia, objectively, are high, for Asian circumstances.

I’m not so concerned for Europe and especially not for the U.S. at this point.

Okay, and just a quick follow-up, normally where we see inventory, particularly in Asia start to build, so there’s more pricing pressure. You’re expecting gross margins to improve but are you going to weigh taking share or losing share versus pricing and profitability?

No. We have built into our plans increased price decline, especially on the actives in 2008 vis-à-vis the same price decline in 2007.

So we have built this into our model, into our budget.

Your comments around gross margin are pretty interesting about an improvement in March. Looking back historically though they’ve been up for the past six years sequentially in March.

So I guess can you help us maybe quantify or get a better grasp around that sense? December was so weak.

If December came in as expected, which it came in lower than expected would you still expect to see March up or down, just because it seems like March would always be up. And I think I want to make sure expectations are somewhat realistic.

Right. First of all it’s very simple you say the first quarter in Vishay is a good quarter, no question about it.

This has many reasons. One of the reasons of course is that we are strong in Europe and passive specialties are strong in Europe.

This helps. It’s true what you say.

Of course my statement would then would not have been one to two points up for Siliconix for instance. Or it would not have been.

But I say these still would have guided up in gross margin.

And then as a quick follow-up on a different topic, you’d mentioned a new IT system. Was that just in the Measurements Group?

Or was this something company wide?

No, no this is only related to the Measurements Group, which has a different system, a different planning tool.

And you mentioned that was a little bit of extra cost or transition? When do you think, is that a six-month transition?

This one was a cost in the quarter. That was it.

A follow-up, on the gross margin, I know you gave on some of the segments, some improvement estimates. Did you give a total overall expectation for gross margins?

We were guiding up. We did not give a complete number.

We were guiding up but we gave the details.

And so, but for the total, it seemed like there was some segments, just the notes I have quickly, is it more like 20 basis points, 100 basis points?

No, it looks more like 100 basis points.

And then just, it seems like for the non-Siliconix semiconductor business, if you could walk through that again, it is Q4 that’s seasonally down?

It was very much in line with the quarter before it, it was maybe 0.5 points down or so. This is more seasonable but basically speaking, they are within the range.

They are never constant, these businesses are not exactly constant quarter after quarter but it was nothing I had to comment on I felt. It was very close to the quarter before.

Okay I just would think normally those businesses would be a little bit stronger in Q4 seasonally.

I would not over-interpret 0.5 points or something in this case. We have not seen anything.

We are seeing this as a very stable and dependable asset business.

And then just the passive business in general, it would help me if you could just give some industry comments. I think one of your competitors anyways is doing some consolidations and seems like maybe it is a little bit of a challenging environment out there in general, just curious if you could give some industry comments on how you see the passive market currently?

Passives market for Vishay is a market for a specialty product mainly, especially in resistors and to a larger degree also in capacitors, which makes us different from our competition, which is to a much larger extent in the commodity part of the business. So for us the arena is not as competitive as it is; and when resistors in the fourth quarter were down to 27% and we expect normally between 28% and 31%, this was due to our own things, so to speak.

This was due to temporary costs for moving production etcetera, etc. Principally speaking, from a competitive situation, resistors are very stable for us.

Okay and then last question was just on the Measurement business. If I understand it correctly it was a little bit of improvement sort of short-term but then the outlook’s slowing with a book-to-bill I think of 0.9% you said.

It tends to be a pretty stable business so I was hoping to get a little bit more color on that? And then it seems to have been a great business for you margin-wise and I’m just curious if there are any new sort of long-term opportunities that might increase the growth rate there?

Felix, would you like to comment on the Measurements Group?

Well Measurements Group is a stable business. It’s composed of sensors, transducers and systems.

We expect this to grow but the past has shown that the growth is rather slow. I don’t know how to comment it more because that business which we are in since the beginning, this was the foundation of Vishay.

It is a cash producer. It is a good business very much.

It is stable. It doesn’t have a big upturn.

But we see major opportunities just to add to that on the cost side.

Yes this is to some degree speculation. I hope it comes through.

Some major opportunities in systems whereby we integrate strategies into transducers into systems. We had a few successes but I don’t want to overemphasize it.

No I meant the costs, Felix. On the cost side there are firm plans to...

Yes, on the cost side we are going to reduce cost in many areas and improve profitability.

And could you give an example or two of the systems that you’ve had some success in?

Yes, we introduced systems to improve quality and yield in paper machinery. We are producing a transducer system which aligns the machines in such a way that the yield, instead of being 94% becomes 99% for paper, which is being put on spools.

This depends on the precision in which we can align the spools when you change the spools one to the other during the winding of the paper. This has been introduced in Sweden, 10 machines have been sold successfully, and we try to introduce it now in Germany and the United States.

We had two successes there, which worked well, and also in Russia six successes. We hope it will grow across the board.

In many, many countries there are machines, which require upgrading improvement in yields, but it’s a very difficult sell. It’s profitable but potentially we hope it will come through in a major way, but at this point I don’t want to put a fire behind it and then to find out it doesn’t go well.

We have sold so far 8 machines at presently price of that per machine is approximately $600,000 and it’s quite profitable.

Yes, I want to thank you for your interest in Vishay. We appreciate your comments and questions and we wish everybody a happy day.

Thank you.