Germany hands Vishay a $241 million check for its power-chip fab, four days before its margin test
Schleswig-Holstein's €215 million grant covers about a fifth of a €1 billion 300mm power-MOSFET fab at Itzehoe, four days before Vishay must show 24% gross margin. Shareholders already funded the first instalment with an $830 million share sale.
Vincent Jiang · 3 min read
Kiel pays its share of a €1 billion fab
On October 30, 2026, Schleswig-Holstein's economy minister Claus Ruhe Madsen handed Vishay Intertechnology−10.23% — Vishay Intertechnology, down 10.23 percent today a grant notice worth about €215 million ($241 million) for its site in Itzehoe, northern Germany 12. Vishay, a Malvern, Pennsylvania component maker listed in New York 5, calls the investment a "high three-digit million" sum; the state CDU faction puts it near €1 billion.
The money adds a 300mm wafer fab beside Itzehoe's existing 200mm line to make power MOSFETs, the transistors that switch current in cars, factory gear and AI computers, with up to 250 jobs 12. Brussels cleared the aid in July: roughly €214 million for Itzehoe inside a €659 million package for four German projects, next to Element 3-5's silicon-carbide wafer plant, KLA−5.24% — KLA, down 5.24 percent today and KETEK 23.
Shareholders paid the first instalment
The check lands after Vishay's owners had funded the build. In June the company sold 17.25 million new shares for $830 million net 45. Second-quarter capital spending of $95 million included $66 million for the Itzehoe line, about half of the $400 to $440 million earmarked for 2026; equipment is assembled, engineering wafers are due by year-end and production starts in mid-2027 4.
Capex is running 47% to 80% above last year as the Itzehoe line is built
Data
| Capex | |
|---|---|
| Q1 '25 | $61.3M |
| Q2 '25 | $64.4M |
| Q3 '25 | $52M |
| Q4 '25 | $94.5M |
| Q1 '26 | $110.6M |
| Q2 '26 | $95.1M |
The stock has since fallen 28% in three months, to about 2% above its post-earnings low, against a $4.51 billion market cap 67. The grant equals roughly 5% of that, and about a fifth of the project's cost: the funding mix for Itzehoe just shifted from diluted shareholders toward German taxpayers 67.
Reported gross margin has risen four quarters running toward the 24% guide
Data
| Vishay gross margin | |
|---|---|
| Q3 '24 | 20.5% |
| Q4 '24 | 19.9% |
| Q1 '25 | 19% |
| Q2 '25 | 19.5% |
| Q3 '25 | 19.5% |
| Q4 '25 | 19.6% |
| Q1 '26 | 21% |
| Q2 '26 | 23.3% |
The November 4 margin test
Gross margin has climbed four quarters running, from 19.0% in early 2025 to 23.3% reported in the second quarter, 22.6% adjusted 49. Management guided the third quarter to 24%, plus or minus half a point, a quarter ahead of its exit-2026 goal, on revenue of $945 to $975 million against $971.9 million consensus 46. Orders back the guide: book-to-bill of 1.32, backlog of $1.9 billion covering 6.1 months, Americas passives orders at a 20-year high 4. Brooklands Fund Management opened a $25.9 million stake in the third quarter 7.
Capacity is arriving into a split market
The demand backdrop cuts both ways. X-FAB, the specialty foundry, posted third-quarter automotive revenue of $119.1 million, down 19% year on year, though bookings jumped 38% and it banked its first Chips Act payment for its Erfurt fab 8. Vishay's own automotive revenue rose 10.1% year on year last quarter 4. The grant buys capacity, not customers 2, and Vishay's wafer chief Markus Keil says subsidies are "dramatically important" because European costs run well above Asia's 1. Brussels has now cleared €1.34 billion of chip aid in four decisions this year 23.
Brussels cleared €1.34 billion of chip aid across four 2026 decisions
Data
| Value | |
|---|---|
| Four German projects, incl. Vishay (Jul) | €659M |
| Infineon, Villach GaN fab (Oct) | €319M |
| Zeiss and Zadient (May) | €288M |
| QuantumDiamonds (Jun) | €76M |
What the print settles
Three numbers decide November 4: gross margin at or above 24%, book-to-bill holding above 1, and fourth-quarter guidance 6. A miss revives the double-ordering question management itself has flagged 6. Schleswig-Holstein has paid its share of the fab; the 24 percent is still all Vishay's to earn 6.
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