Note 10 – Segment Information

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, five 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 and inductors both impede electric current. 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. A small portion of revenues is from royalties.

The Company evaluates business segment performance on operating income, exclusive of certain items ("segment operating income"). 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 such selling, general, and administrative costs as global operations, sales and marketing, information systems, finance and administration groups, as well as restructuring and severance costs, goodwill and long-lived asset impairment charges, and other items. 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.

The Company also regularly evaluates gross profit by segment to assist in the analysis of consolidated gross profit. The Company considers segment operating income to be the more important metric because it more fully captures the business operations of the segments.

The following tables set forth business segment information:

	MOSFETs		Diodes		Optoelectronic Components		Resistors & Inductors		Capacitors		Total
Fiscal quarter ended June 30, 2018:
Product Sales	$	136,559	$	182,466	$	75,709	$	253,913	$	112,349	$	760,996
Royalty Revenues		-		-		-		34		-	$	34
Total Revenue	$	136,559	$	182,466	$	75,709	$	253,947	$	112,349	$	761,030

Gross Profit	$	38,427	$	52,408	$	26,404	$	84,969	$	25,030	$	227,238

Segment Operating Income	$	28,517	$	47,100	$	22,165	$	76,248	$	19,710	$	193,740

Fiscal quarter ended July 1, 2017:*
Product Sales	$	114,035	$	155,345	$	72,633	$	208,949	$	92,166	$	643,128
Royalty Revenues		-		-		-		36		-	$	36
Total Revenue	$	114,035	$	155,345	$	72,633	$	208,985	$	92,166	$	643,164

Gross Profit	$	25,357	$	41,762	$	25,607	$	62,135	$	18,976	$	173,837

Segment Operating Income	$	16,680	$	36,878	$	21,676	$	54,749	$	14,146	$	144,129

Six fiscal months ended June 30, 2018:
Product Sales	$	264,053	$	349,483	$	147,667	$	497,932	$	218,617	$	1,477,752
Royalty Revenues		12		-		-		61		-	$	73
Total Revenue	$	264,065	$	349,483	$	147,667	$	497,993	$	218,617	$	1,477,825

Gross Profit	$	70,449	$	95,608	$	53,637	$	163,499	$	49,345	$	432,538

Segment Operating Income	$	51,075	$	85,031	$	44,959	$	146,250	$	38,603	$	365,918

Six fiscal months ended July 1, 2017:*
Product Sales	$	218,877	$	299,930	$	137,895	$	409,195	$	182,026	$	1,247,923
Royalty Revenues		-		-		-		42		-	$	42
Total Revenue	$	218,877	$	299,930	$	137,895	$	409,237	$	182,026	$	1,247,965

Gross Profit	$	46,074	$	79,924	$	48,049	$	123,350	$	38,189	$	335,586

Segment Operating Income	$	28,483	$	70,320	$	38,793	$	108,707	$	28,336	$	274,639

*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07. See Note 1.

	Fiscal quarters ended						Six fiscal months ended
	June 30, 2018			July 1, 2017***			June 30, 2018			July 1, 2017***
Reconciliation:
Segment Operating Income	$	193,740		$	144,129		$	365,918		$	274,639
Restructuring and Severance Costs		-			(481	)		-			(1,950	)
Unallocated Selling, General, and Administrative Expenses		(70,447	)		(58,643	)		(138,563	)		(120,106	)
Consolidated Operating Income	$	123,293		$	85,005		$	227,355		$	152,583
Unallocated Other Income (Expense)		(25,734	)		(9,296	)		(37,777	)		(26,432	)
Consolidated Income Before Taxes	$	97,559		$	75,709		$	189,578		$	126,151

***Recast for the adoption of ASU 2017-07. See Note 1.

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:

	Fiscal quarters ended				Six fiscal months ended				Years Ended December 31,
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017		2017		2016
Distributors	$	446,016	$	372,802	$	850,076	$	718,505	$	1,484,276	$	1,280,060
OEMs		262,779		223,367		526,829		438,014		931,291		861,322
EMS companies		52,235		46,995		100,920		91,446		183,801		175,946
Total Revenue	$	761,030	$	643,164	$	1,477,825	$	1,247,965	$	2,599,368	$	2,317,328

Net revenues were attributable to customers in the following regions:

	Fiscal quarters ended				Six fiscal months ended				Years Ended December 31,
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017		2017		2016
Asia	$	302,868	$	272,513	$	588,346	$	529,571	$	1,091,107	$	948,195
Europe		272,601		221,150		539,983		427,175		902,357		810,543
Americas		185,561		149,501		349,496		291,219		605,904		558,590
Total Revenue	$	761,030	$	643,164	$	1,477,825	$	1,247,965	$	2,599,368	$	2,317,328

The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets. Sales by end market are presented below:

	Fiscal quarters ended				Six fiscal months ended				Years Ended December 31,
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017		2017		2016
Industrial	$	295,617	$	232,874	$	575,829	$	449,640	$	934,631	$	796,031
Automotive		209,858		175,884		418,252		351,227		727,220		640,767
Telecommunications		46,467		47,283		92,391		93,118		190,682		193,456
Computing		53,657		47,498		101,088		88,568		198,850		172,481
Consumer Products		40,939		38,949		78,198		68,556		145,243		150,741
Power Supplies		41,326		41,038		75,569		75,896		160,038		132,555
Military and Aerospace		40,260		32,548		75,474		65,724		132,898		128,523
Medical		32,906		27,090		61,024		55,236		109,806		102,774
Total revenue	$	761,030	$	643,164		1,477,825		1,247,965	$	2,599,368	$	2,317,328