A record order book and a falling share price

Vishay Intertechnology, the Malvern, Pennsylvania maker of the small power transistors, diodes and passive parts that sit on nearly every industrial circuit board, spent the summer being told by customers to build more capacity. Second-quarter orders ran at 1.32 times shipments, and backlog climbed to $1.9bn — about six months of coverage. Distributors, who had been holding 20 weeks of stock, cut it to 18 while selling through 20.5% more than a year earlier, the shape of real consumption rather than a restocking scramble. Adjusted revenue was $919m, up 20.5% from a year ago, and management attributed 30.1% industrial growth to smart-grid, AI power and high-voltage direct-current projects, with some customers ordering beyond 52 weeks out to lock in production slots.

The shares fell 16.9% over the following month.

The content arrives at the wrong margin

Here is the catch that the order book hides. The product doing the AI work — the MOSFET, the switch that converts rack voltage down to what a processor can use — is Vishay's least profitable line. MOSFETs generated $188.9m of revenue at a 13.8% gross margin last quarter, against $187.0m of diodes at 24.4%, and a company-wide 22.6%. Compare onsemi, the vertically integrated silicon-carbide supplier that owns its own crystal growth: its second-quarter gross margin reached 39.3%, guided to 40-42%, with data-center silicon-carbide revenue up nearly 60%. Same megawatt, roughly three times the margin. Volume growth at 13.8% buys far less earnings than the headline order book implies.

Vishay is also spending into it. Capital expenditure is guided to $400-440m for 2026, roughly half of it a German 12-inch fab that will not make non-automotive parts until mid-2027, and free cash flow stays negative this year. To fund it the company sold 15m shares at $50 on 29 June, raising about $830m net and adding roughly an eighth to the share count. At $31.04 the stock sits well below that price. Price per dollar of trailing gross profit has gone from 4.3x in February to 8.0x in late May to 6.3x now — a de-rating of a fifth while trailing gross profit itself compounded 17%, from about $595m to $695m. On forward earnings the stock is 36.9x against 120.7x trailing, but that gap is recovery, not growth: 2025 net income was -$9.0m.

Wolfspeed's fall needs no explaining

Wolfspeed, the Durham, North Carolina silicon-carbide maker that emerged from a prepackaged Chapter 11 last September having cut roughly $6.7bn of debt to about $2bn, is the opposite case. Fourth-quarter revenue of $149.6m missed the $223.6m consensus by a third, the fourth consecutive quarterly decline and 24.1% below a year earlier. Non-GAAP gross margin was still around -20%; adjusted EBITDA was -$62.4m against $1.1bn of cash. Consensus has fiscal 2027 revenue falling a further 15% to $642.8m.

The AI piece is real but unpriced. Data-center revenue more than doubled in fiscal 2026 and grew about 20% sequentially, with a design win at Taiwan's LITEON — disclosed only as growth rates, never dollars, inside roughly $106m of total power revenue. A named customer without a number is a slope, not a line item. The stock has fallen 63.4% from $73.50 on 26 May, and price-to-sales tracks the story rather than the business: 1.4x in February, 4.3x at the May peak of the 800-volt trade, 2.1x today, on a revenue base that shrank throughout.

Whose socket it is

NVIDIA's published 800-volt direct-current ecosystem names Infineon, onsemi, Navitas, STMicroelectronics, Texas Instruments, Analog Devices, Renesas, ROHM and Monolithic Power as its power-semiconductor partners. Neither Wolfspeed nor Vishay appears, and the infrastructure transition starts in 2027. Navitas, the gallium-nitride and silicon-carbide pure play, has $10.5m of quarterly revenue at a negative gross margin and a $3.3bn market value — larger than Wolfspeed's $1.39bn on a fourteenth of the sales. That is what the market is paying for optionality it believes in.

AXT, the Fremont maker of indium-phosphide and gallium-arsenide substrates for optical data-center links, is the one name here whose numbers already arrived: record revenue of $47.6m, up 164% year over year, gross margin of 45.0% against 8.2% a year ago, third quarter guided near $66m, with prepaid long-term supply deals from Coherent and Casella. It is priced accordingly at 50.6x forward gross profit — about eight times Vishay's multiple on the same measure — and remains hostage to Chinese export permits that capped its shipments in late 2025.

The last five sessions were a bond story

None of this explains the past week, in which all seven US-listed discrete and power semiconductor names fell between 8.9% and 15.4% together, alongside onsemi at -10.1%, Texas Instruments -5.7% and Analog Devices -4.0%. The 30-year Treasury yield hit a 19-year high of 5.33% on 18 August and more than $1trn came off global chip market values on fears that AI infrastructure spending is peaking. Estimates did not move; the multiple did.

The setup

Where it stands — Vishay's order book is inflecting on AI and grid demand while its shares de-rate; Wolfspeed's decline matches a still-shrinking, loss-making business. Would confirm — Vishay's third-quarter gross margin printing at the guided 24.0%, with MOSFET margin above 15%. Would invalidate — Book-to-bill falling below 1.0 or distributor weeks-on-hand rising back above 20. Watch next — Vishay's third-quarter results, guided to $945-975m of revenue; Wolfspeed's first quarter, guided to $140-160m. Valuation — Vishay: 6.3x trailing gross profit versus 8.0x in late May and 4.3x in February; 36.9x forward earnings against 120.7x trailing.