Current Vulnerability Due to Certain Concentrations

12 Months Ended

Dec. 31, 2021

Current Vulnerability Due to Certain Concentrations [Abstract]

Current Vulnerability Due to Certain Concentrations

Note 14 – Current Vulnerability Due to Certain Concentrations

Market Concentrations

No customer represented greater than 10% of consolidated net revenue in 2021 or 2020.

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.  No customer comprised greater than 10% of the Company’s accounts receivable balance as of December 31, 2021.  As of December 31, 2020, one customer comprised 17.2% of the Company’s accounts receivable balance.  No other customer comprised greater than 10% of the Company’s accounts receivable balance as of December 31, 2020.  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, 2021, the following financial institutions held over 10% of the Company’s combined cash and cash equivalents and short-term investments balance:

JPMorgan*	22.6	%
MUFG Bank Ltd.*	20.6	%
Bank Leumi*	12.8	%
HSBC*	10.6	%

*Participant in Credit Facility

Sources of Supplies

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 the current year 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.

The Company's production can be disrupted by the unavailability of resources, such as water, electricity, 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 76% of revenues earned during 2021 were derived from sales to customers outside the United States.  Additionally, as of December 31, 2021, $895,363 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, 2021 the Company’s cash and cash equivalents and short-term investments were concentrated in the following countries:

Singapore	24.0	%
Israel	18.8	%
Germany	15.4	%
United States	12.3	%
People's Republic of China	11.4	%
The Republic of China (Taiwan)	9.1	%
Other Asia	6.2	%
Other Europe	1.8	%
Other	1.0	%

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 51 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.