Good morning. My name is Latricia [ph] and I will be your conference operator today. At this time, I would like to welcome everyone to Vishay's First Quarter 2010 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remark, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the conference over to Dr. Yahalomi. Please go ahead, sir.

Thank you, Latricia. Good morning. This is Lior Yahalomi, Vishay's Chief Financial Officer. Ladies and gentlemen, you're welcome to Vishay's first quarter 2010 earnings call. On the line with me today are Dr. Felix Zandman, Vishay's Executive Chairman and Chief Technical and Business Development Officer; Dr. Gerald Paul, Vishay's President and Chief Executive Officer; Lori Lipcaman, Vishay's Executive Vice President and Chief Accounting Officer; and Dave Tomlinson, Vishay's Senior Vice President, Corporate Controller. Before I start, Dave Tomlinson will read our customary opening statement. Dave?

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.

Thank you, Dave. I will make summary remarks. Dr. Paul will add a more detailed analysis of our first quarter 2010. And finally Dr. Zandman will update our R&D and acquisition activities and will add summary remarks. Quarterly results; for the first quarter of 2010, Vishay reported revenues of $640.5 million, 5.5% higher than the fourth quarter of 2009 and 42.5% higher than the first quarter of 2009. Our consolidated gross margin for the quarter was 26.1%, as compared to 22.6% for the fourth quarter of 2009, and 15.1% for the first quarter of 2009. The increase from the fourth quarter of 2009 reflects the continued recovery from the historical global economic crisis, with increased sales and the cost reduction initiatives implemented by the Company. SG&A expenses for this quarter were 101.9 million, or 15.9% of revenues, as compared to 98.3 million or 16.2% of revenues for the fourth quarter of 2009, and 87.1 million or 19.5% for last year's first quarter. Other income and expense for the first quarter 2010 consists of $2.4 million of interest expense. The effective tax rate for the first quarter of 2010 was 27%. Capital expenditures for the quarter were $18.1 million, compared to 24 million in our fourth quarter of 2009 and 11.3 million in our first quarter of 2009. Depreciation and amortization for the quarter was $50.4 million as compared to 60.1 million, in the fourth quarter of 2009 and 54.6 million, in the first quarter of 2009. As announced in the press release Vishay reported earnings attributable to Vishay stock holders of $0.24 per diluted share for the first quarter of 2010. There were no unusual items for the first quarter of 2010, earnings per share of $0.24 for the quarter represents improvement as compared to net earnings per share of…

Thank you Lior, and good morning everybody. I think we had a good quarter and I believe also the upturn of Vishay’s business during this quarter accelerated further with orders clearly exceeding pre crisis levels, due to stable prices, manufacturing efficiencies, and impertinently [ph] to reduced fixed costs. We in the first quarter achieved higher profits than before the crisis despite the lower sales 10 to 15%. Reported $0.24 per share adjusted as well as GAAP as Lior said, there were no unusual items reported for the quarter thus no adjustments to our GAAP earnings per share. The cash generation was strong again, free cash in the quarter was 50 million. A very strong order book indicates the continuation of the upturn. Let's talk about the economic environment. The overall market demand for electronic components accelerated versus an already substantially improved fourth quarter. There are shortages of supply and continuously increasing lead times. We also see an increasing nervousness of the buyers. There is an extremely low level of inventory in the supply chain as manufacturing up to now has not caught up with demand. This whole situation is more severe semiconductors, but also noticeable at passives. We have seen a strong POS up by 13% vis-à-vis the last quarter and very high inventory turns at distribution. Worldwide we have seen 5.0 turns after 4.2 turns in the fourth quarter, in the Americas 3.4 turns and 3.0 turns. In Europe up to 5.2 turns after 3.9 turns, in Asia up to 6.7 turns after 5.8 turns. So you see the inventories are down by another 6% at our distribution despite the POS is up by 10%. All markets and all regions were strong. I would even say Asia was overheated driven by lot of netbooks in the consumer industry. Automotive…

Good morning. I'm Felix Zandman Executive Chairman of the Board of Vishay and Chief Technical Officer and CBDO. Good morning. It is interesting to examine the earnings per share for the past five quarters, which include calendar year 2009 and the first quarter of 2010. We went from minus or negative $0.08 per share for the first quarter of 2009 to minus $0.10 per share second quarter of 2009, and started recovery we have rebound. Plus $0.03 per share for the third quarter of 2009 to $0.16 per share for fourth quarter of 2009, and finally to $0.24 per share for this quarter Q1 2010. The present running quarter Q2 of 2010, also looks very good. Our gross margin also increased from 15% in Q1 2009 to 26% in Q1 2010. This 26% of gross margin is already better than the gross margin in 2010, pre-recession. Q2, gross margins should further increase in spite of increasing sales exceeded not to increase fixed cost not to increase as a matter of fact that this cost will slightly down. Vishay is now functioning at the higher plateau. The sales bookings and general activities are very brisk. We continue to generate free cash $50 million for this quarter. I would like the congratulate our President and CEO, Dr. Gerald Paul, on his excellent leadership during the recent global economic crisis during which he restructured the company in order to position it for the current and future earnings growth as exhibited during the past three quarters. Reduction of fixed overhead and other measures have positioned the company for yet better earnings per share in the future. Congratulations are also due to Mr. Ziv Shoshani who most recently has been the COO of the corporation and General Manager of the Vishay Precision Group that we are spinning. He will be the COO of the Vishay Precision Group, we called VPG. He has done as a great job preparing VPG to be a standalone company and spin it off successfully. Ziv have exhibited first class leadership, management characteristics and business acumen. I'm certain he will take VPG to new heights. The separation of VPG from Vishay should occur in mid 2010. Our R&D activities continue as planned. A few examples of new design in our products in data market industry for future cars and then as our savings have shown as of today on Vishay's website as part of our corporate presentation. We're asking to you looking for acquisitions in both positive and negative components. All in all the company is doing well and we expect even better results in the immediate future. Thank you. You are not invited to ask questions. Please.

Thank you. [Operator Instructions] Your first question comes from Shawn Harrison. Shawn Harrison – Longbow Research: Hi. Good morning. Looking at the capacity constraints this quarter, how much revenue do you think you left on the table particularly given that inventories at distribution sale 6% sequentially, which I guess underscores the capacity constraints in the shortages in the market?

There would have been no question that we could have sold at pre-crisis levels if we had the pre-crisis capacity already in place. It means something like 10 to 15% more. Shawn Harrison – Longbow Research: Okay. I guess, the follow-up to that is looking at the backlog now of $903 million how much of that do you think is actually shippable versus maybe overheated supply chain out there, given I don't think I’ve seen these book-to-bill ratios in a decade across many of the market segments. So just trying to get an idea of how you’re reading through the sky high book-to-bill ratios with the backlog in orders that you have to what is true demand and what is shippable over the next say, two to three quarters.

I think we are very well set for the next quarters. So the guidance which we give is very much on solid grounds, the remainder is speculation. I do believe because of the inventory, in the supply chain is that low, objectively that low, that the share of the questionable backlog if you want to call it like that is relatively small. But whole pipeline as far as we can judge is really empty. Shawn Harrison – Longbow Research: Okay. And then I guess two quick follow-ups and I’ll get back in to the queue. The new business breakouts the diodes and opto business. What should we look at as incremental gross margin for each of those businesses? You mean the variable margin. Shawn Harrison – Longbow Research: Yes.

Variable margin approximately I would say the diodes between 40 and 43%. and opto business is better, it's around 50. Shawn Harrison – Longbow Research: And then the variable margin for the new or I guess, the resisters business that you’re holding on to.

It doesn't change really. Shawn Harrison – Longbow Research: Okay. Thank you.

Your next question comes from Jim Suva. Jim Suva – Citigroup: Great. Thank you very much. You're approaching – are you at basically peak gross margin levels since we've seen since eight years ago or so. With sales increasing it appears that your margins should see some more upside here and you've restructured the business extremely well. Can you let us know kind of optimally what type of gross margins it seems like the Vishay should be running now at this post restructuring level.

Well, last time you may remember we talked about sustainable gross margins per product line. And we thought about the same question in the light of first quarter to which degree does this leave, even upside vis-à-vis what we said before. And as it looks especially resisters inductors seem to contain upside for the future, where as the numbers we said before we you may remember just to repeat them. We have said something like 30% for resisters inductors sustainable gross margin capacitors between 23 and 25%, Siliconix 25 to 27% and semi between – which is the combination of diodes and opto is just between 22 and 24%. I mean, we are – Siliconix in particular far away still from that we are sure that we're going to get there with growing volume. So altogether, you're right the gross margin of 26% is not the end of the story. It will be higher in this combination depending how the mix will be. We'll not be surprised if this could be another say 2%. Jim Suva – Citigroup: Great. And then just a quick housekeeping item, just kind of 27% tax rate a good tax rate and when we look at breaking out the Precision Group's when the spin actually occurs is that how we kind of should account for it in the Vishay remaining business?

We do expect the tax rate to be in the mid to high 20s, moving forward and it is as we estimate 27% for the year. And that is including the expected spin-off. Jim Suva – Citigroup: The spin-off will not change that.

Not change that. Jim Suva – Citigroup: No, but as far as your accounting and the way you will communicate post spin will be at the time of date going forward you won't consider a discontinued op.

Yes, yes. Jim Suva – Citigroup: Great, thank you, and congratulations everyone to you and your team for a very well job done.

Thank you.

Thank you.

Your next question comes from Matthew. [ph]

Great, thank you. Just wondering you could talk a little bit about how you are thinking about operating expenses here. Last quarter you were thinking maybe $98 million, and I think it was a little bit higher than this quarter. Is that just you're preparing for…

We are -- we stick to our forecast about 400 -- about 200 -- excuse me…

You said…

400 million per year. About 400. So no change of our forecast.

Okay. So I shouldn’t…

This slightly increase came from exchange rate for the most part.

Okay. All right. And then with regard to the capacity step upcoming for Siliconix. How should we think about how that works with relation to potential jump there in revenue and change in gross margin? So seems like there is plenty of demand there, you guys have some very good parts in that space. Does that mean you get a potentially significant sequential increase there in revenue? And then since you had that extra capacity coming online, will there be extra cost that’s coming on line? While I understand that we will see a gross margin improvement there is that pushed out of couple of quarters?

As a matter of fact it goes straightly -- strictly with volume, because the fixed cost will be fixed. We will not change the fixed cost, not increase the fixed cost on top of what we have now. So really what you see in terms of sales increase, will go straight to gross margin -- excuse me, sorry, 50% about to gross margin.

Okay. And is it reasonable for those to expect to see a big revenue jump there sequentially?

Will be through the order of 10% or more.

Okay. All right. Great. Thank you.

The next question comes from Matt Sheerin.

Hi, this is Mike Levinson [ph] in for Matt Sheerin. I was hoping you could talk about if you are concerned about what's double ordering? Are you seeing any signs of double ordering right now?

Nobody can exclude at this point in time double ordering. On the other hand the order book is really full. We are very solid in quarter two and my additional -- as I said before, additional remark is that the pipeline is very empty. This makes this situation quite unique and gives us quite a confidence also for a second half of the year.

Okay. Thanks. And then if you could talk a little bit more about the pricing environment and if you were able to put in price increases?

Yeah, selectively, this is a time for price increases, no question about it. On the other hand there are contracts which we always honor. On the other hand for sure, unless you have seen from what I have said before the price decline already has slowed down dramatically vis-à-vis historic levels. All this is not a step function of course. This, of course, we have contract. It’s a mixture of price increases in contracts, which are there. I think it’s fair to forecast that the price decline will go down further.

(Operator Instructions). Your next question is a follow-up question from Shawn Harrison. Shawn Harrison – Longbow Research: Hi. It’s just a follow-up to the incremental capacity coming on line at Siliconix. I want to be clear on the statement. It sounds like you're adding more, I guess, variable capacity, outsourced capacity versus installed?

Yes, it’s inside and outside both. So as I mentioned in my speech, we have started to establish a full shift in Siliconix in November or so. And now in the course of the second quarter this becomes fully operational. And this is one of the sources of higher capacity and then of course through -- from the outside from foundries we also getting ways we have continued to qualify new sources. Shawn Harrison – Longbow Research: Okay. But at the same time you may still be constrained in terms of wafer availability?

I think like everybody at the moment in MOSFET, all of us could sell more if we could make more for all of us through I would say. Shawn Harrison – Longbow Research: Okay. And then in terms of the guidance, with the dollar strengthening lately, I guess what exchange rate versus the Euro is I guess…

It’s really the XO1 -- it’s one -- I mean the average was one, but I don't know by heart but it must have been 1.33 or something. It was 1.33. Shawn Harrison – Longbow Research: Okay.

Dollar to the Euro. This is approximately it. Shawn Harrison – Longbow Research: So a relatively real-time.

Yeah. Shawn Harrison – Longbow Research: Okay. And then finally just, maybe some update on the cash usage, you are going to be generating a significant amount in free cash flow. I know last quarter you talked about looking at smaller types of acquisitions. Maybe you could just talk about what you are seeing out there in the market environment? Are prices getting better? Just how you would look to deploy the cash going forward?

Felix, do you want to talk about this.

Well, we are looking at many acquisitions in small size and average size. Pricing is about -- it’s difficult to comment because on one hand some of them prices are higher, some of them are willing to sell now, but we are very careful with that. Acquisitions you don't buy like on this like in a store certain products. You have to negotiate that, you have to see that, but companies are available and we are looking at that. Pricing is about constant. We didn't see any major increases in prices, no major growth. Shawn Harrison – Longbow Research: Okay. Thank you. And congratulations again on the quarter.

Thank you.

Your next question is a follow-up question from the line of Steve Smigie. Steve Smigie – Raymond James: Great, thanks for the follow-up question. Dr. Paul, I was hoping you can talk a little bit more about you mentioned some over-heating in Asia. I know you guys are looking at being very careful about understanding what true demand is. But you did mention overheating, so is that -- when you mean that, do you just think that the orders are coming in earlier than they should because of lead times or -- I’m just -- I was hoping you could sort of give…

It is principally speaking the same mechanism. All of us, and Vishay is no exception, have problems to meet demand. The recovery from the crisis, like the crisis itself, happened very abruptly, very abruptly. And all of -- especially distribution, which is to a degree understandable in the crisis, minimized their inventory and so did OEMs so all of them did. And crisis really came back more in terms of business came back after the crisis is within the quarter I'd say. They are completely but it went up very drastically which caused all of us in the [inaudible] supply chain by surprise. Then of course the lead times went out, then of course a next step the systems that command the orders, the systems themselves get nervous and of course order even more. So it's like circle, it's like -- which happens all the time principally. In the meantime, all this is especially dramatic in Asia because as we know in Asia the inventory levels people are ready to tolerate are very low. Whatever happens everywhere is there particularly drastic but this is not the first time, because it is always like that. Because they have low buffers they don't believe in buffers. This time only say I'm 30 years in this business I've never seen increase so steep and I believe my colleagues more or less feel the same way. Steve Smigie – Raymond James: Right. So how do you approach that from management's perspective? I mean you got this feedback little bit keeps ramping up. You just haircut all the orders or we got to have external inventory to be ready for whatever?

I'm talking only MOSFET. For the remainder it's been relatively okay. But for MOSFET no question about it. Of course, we work together with our distributors on inventory what is reasonable what is maybe not reasonable. So we try to distribute our available capacity which grows in a reasonable form, that everybody -- if you don't let down anybody is possible. Steve Smigie – Raymond James: Last question just, if you talk a little bit about cash for you guys, cash flow very good cash flow generators change a little bit from last quarter, talk a little bit about what stepped down and how we should are going to be thinking about your cash flow potential going forward?

First of all you shouldn't compare to the fourth quarter. In this case more meaningful to compare quarter with one year ago and in this case we are even a little better as you've seen. It's up free cash. I see approximately the same performance as prior year. Steve Smigie – Raymond James: Okay. Good. Thanks a lot.

Your next question is a follow-up from Jim Suva. Jim Suva – Citigroup: Thank you. A quick clarification what were you expecting for CapEx now that we are coming out of the recession for the year, and then you maybe you can help us with what you mentioned that work orders above pre-crisis, how much excess orders are overheated do you think like 5-10% or -- I know everyone is just worried on double ordering.

[Technical difficulty] Order book is so full and the pipeline was so empty that nobody should be scared that the situation if sales level breaks down immediately or quickly. We're feel very safe for the foreseeable future. Some booking must be there by principal but we try to minimize within working with our distributors in working with the OEM's. I feel solid. Some overheated some impact of the overheated situation of cause exists but you know it doesn't change the picture.

I have been at the conference this is Dr. Zandman I have been at the conference for distributors few months ago and at that time there was a vote taken in the audience who believes in V upturn or in a W [ph], well the majority was for W. Today they don't speak more about W. Everybody is for V. And there is some voted for square root and V stabilization. Now most of the people we talk to speak about a V as they don't see too many major drop. And it is because of what Gerald said inventories are empty, demand is very brisk. Jim Suva – Citigroup: Thank you, congratulations again.

Thank you.

Thank you there are no further questions at this time. I will now turn the conference back over to Dr. Lior Yahalomi for closing remarks.

Thank you for your participation in our call. We appreciate your interest and look forward for your continued interest at Vishay. Thank you.

Thank you for participating in today's conference call, you may now disconnect