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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[NO FEE REQUIRED]
For the fiscal year ended December 31, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[NO FEE REQUIRED]

For the transition period from _______ to _______

Commission file number 1-7416

VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)

Delaware 38-1686453
-------- ----------
(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)

63 Lincoln Highway
Malvern, Pennsylvania 19355-2143
(Address of principal executive offices)

(610) 644-1300
--------------
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.10 par value
(Title of Class)

New York Stock Exchange
(Exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No ____


Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer
(as defined Exchange Act Rule 12b-2). Yes __X__ No ____

The aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrant's most recently completed second
fiscal quarter, assuming conversion of all of its Class B common stock held by
non-affiliates into common stock of the registrant, was $3,182,840,000.




As of March 27, 2003, registrant had 144,300,063 shares of its common
stock and 15,383,296 shares of its Class B common stock outstanding.

Portions of the registrant's definitive proxy statement, which will be
filed within 120 days of December 31, 2002, are incorporated by reference into
Part III.



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PART I

Item 1. DESCRIPTION OF BUSINESS

General

Vishay Intertechnology, Inc. is a leading international manufacturer
and supplier of passive and discrete active electronic components. Passive
components include resistors, capacitors, transducers and inductors. Active
components include diodes, transistors, rectifiers, power integrated circuits
(ICs), infrared transceivers, infrared (IR) sensors and optocouplers. Passive
electronic components and discrete active electronic components are the primary
elements of almost every electronic circuit. We offer our customers "one-stop"
access to one of the most comprehensive electronic component lines of any
manufacturer in the United States, Europe and Asia in both the newer surface
mount configuration and the traditional leaded form.

Our components are used in virtually every type of product that
contains electronic circuitry, including:

o computer-related products, o automotive applications,

o power management products, o process control systems,

o telecommunications equipment, o military and aerospace applications,

o measuring instruments, o consumer electronics and appliances,

o industrial equipment, o medical instruments, and

o electronic scales.

Since 1985, we have pursued a business strategy that principally
consists of the following elements:

1. expanding within the electronic components industry, primarily
through the acquisition of other manufacturers of electronic components that
have established positions in major markets, reputations for product quality and
reliability, and product lines with which we have substantial marketing and
technical expertise;

2. reducing selling, general and administrative expenses through the
integration or elimination of redundant sales offices and administrative
functions at acquired companies;

3. achieving significant production cost savings through the transfer
and expansion of manufacturing operations to regions such as the Czech Republic,
Hungary, India, Israel, Malaysia, Mexico, the People's Republic of China, the
Philippines, Portugal and the Republic of China (Taiwan), where we can take
advantage of lower labor costs and available tax and other government-sponsored
incentives;

4. maintaining significant production facilities in those regions where
we market the bulk of our products in order to enhance the service and
responsiveness that we provide to our customers;

5. consistency rolling out new and innovative products; and

6. strengthening our relationships with customers and strategic
partners.

As a result of this strategy, we have grown from a small manufacturer
of precision resistors and resistance strain gages to one of the world's largest
manufacturers and suppliers of a broad line of electronic components.


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Our significant acquisitions in the last several years include:

Siliconix and Telefunken. We acquired an 80.4% interest in Siliconix
incorporated (NASDAQ; SILI) in March 1998 from Daimler-Benz A.G. Siliconix is a
publicly traded chip maker, based in Santa Clara, California, which designs,
markets and manufactures power and analog semiconductor products, such as
metal-oxide-semiconductor field-effect transistors (MOSFETs), junction
field-effect transistors (JFETs), bipolar switches, signal processing ICs and
power ICs for computers, cell phones, fixed communications networks, automobiles
and other electronic systems. Siliconix has manufacturing facilities in Santa
Clara, California, maintains assembly and testing facilities in the Republic of
China (Taiwan), is party to a joint venture in Shanghai, the People's Republic
of China and has subcontractors in the Philippines, the People's Republic of
China and the United States. Siliconix reported worldwide sales of $372.9
million in 2002, $305.6 million in 2001, and $473.1 million in 2000.

In the same transaction, we acquired from Daimler-Benz the
semiconductor business unit of TEMIC Telefunken Microelectronic GmbH
headquartered in Heilbronn, Germany, but promptly disposed of its integrated
circuits division. Telefunken launched our expansion into discrete active
components with a product line of diodes, RF transistors, optoelectronic
semiconductors, infrared data transceivers (IRDCs) and light-emitting diodes
(LEDs). Our net cost of these two acquisitions was approximately $444 million.

Electro-Films, Cera-Mite and Spectrol. In May 2000, we acquired
Electro-Films, Inc., a manufacturer of thin film components and networks on
ceramic and silicon. In August 2000, we acquired Cera-Mite Corporation, a
worldwide supplier of ceramic capacitors, used in power supplies, electronic
lighting and other applications, and thermistors (temperature-sensitive
resistors) used in refrigeration, HVAC, telecommunications and other electronic
applications. Separately, in August 2000, we acquired Spectrol, a manufacturer
of sensing potentiometers used primarily in the automotive industry and trimmer
potentiometers used in various kinds of electronic circuitry.

Tansitor and Mallory. In January 2001, we acquired Tansitor, a leading
manufacturer of wet tantalum electrolytic capacitors and miniature conformal
coated solid tantalum capacitors. These components have power management
applications in the military, aerospace and medical industries. Later, in
November 2001, we acquired Yosemite Investment, Inc. d/b/a the North American
Capacitor Company, known as Mallory, a manufacturer and distributor of wet
tantalum capacitors and other products. As a result of these two acquisitions,
we have become the number one manufacturer of wet tantalum capacitors worldwide.

Infineon. In July 2001, we acquired the infrared components business of
Infineon A.G. for approximately $116 million. As a result, we added several new
device types to our optoelectronics portfolio. We also became the largest
supplier outside Japan of optocouplers and the largest supplier worldwide of
IRDCs.

General Semiconductor. On November 2, 2001, we completed the
acquisition of General Semiconductor, Inc., a leader in the design, manufacture
and distribution of semiconductors for the power management market. In the
transaction, we exchanged 0.563 of a share of Vishay common stock for each share
of General Semiconductor stock. Based on the closing price of our common stock
on November 2, 2001, the transaction was valued at approximately $555 million.
General Semiconductor manufactures and distributes a broad range of power
management products, including rectifiers, transient voltage suppressors,
small-signal transistors, diodes, MOSFETs and analog ICs. As a result of this
acquisition, we became the number one manufacturer of diodes and rectifiers
worldwide.

Sensortronics, Tedea-Huntleigh, BLH and Nobel, and Celtron. In January
2002, we acquired the transducer and strain gage business of Sensortronics, Inc.
In June 2002, we acquired Tedea-Huntleigh BV, a leading manufacturer of load
cells used in digital scales by the weighing industry. In July 2002, we
purchased the BLH and Nobel businesses from Thermo Electron Corporation. BLH and
Nobel are engaged in the production and sale of load cell based process weighing
systems, weighing and batching instruments, web tension instruments, weighing
scales, servo control systems, and components relating to load cells, including
strain gages, foil gages and transducers. In October 2002, we acquired Celtron
Technologies, another company engaged in the production and sale of load cells
used in digital scales for the weighing industry. As a result of these
acquisitions, the product portfolio of our Measurements Group has been expanded
and we are now a world leader in stress analysis products and transducers used
in the weighing industry (load cells).

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BCcomponents. In December 2002, we completed the acquisition of
BCcomponents Holdings B.V., a leading manufacturer of passive components with
operations in Europe, India and the People's Republic of China. The product
lines of BCcomponents include linear and non-linear resistors; ceramic, film and
aluminum electrolytic capacitors; switches and trimming potentiometers.
BCcomponents had annual sales in 2001 of approximately $320 million. We acquired
the outstanding shares of BCcomponents in exchange for ten-year warrants to
acquire 7,000,000 shares of Vishay common stock at an exercise price of $20.00
per share and ten-year warrants to acquire 1,823,529 shares of Vishay common
stock at an exercise price of $30.30 per share. In the transaction, outstanding
obligations of BCcomponents, including indebtedness, transaction fees and
expenses in the amount of approximately $224 million were paid or assumed. Also,
$105 million in principal amount of BCcomponents' mezzanine indebtedness and
certain other securities of BCcomponents were exchanged for $105 million
principal amount of floating rate unsecured loan notes of Vishay due 2102. This
major acquisition has significantly enhanced our global market position in
passive components.

In addition to our acquisition activity, during 2002 we took steps to
assure our competitiveness, enhance our operating efficiency and strengthen our
liquidity in the face of the economic downturn, which broadly impacted the
electronics industry during the year. In this regard, we:

(i) closed or consolidated several manufacturing facilities and
administrative offices;

(ii) reduced our headcount, before acquisitions, by approximately 1,400
employees; or a reduction of approximately 7%;

(iii) integrated our acquisitions within our existing management and
operational infrastructure; and

(iv) relying on the strength of our balance sheet, continued our search
for suitable acquisition candidates.

Vishay was incorporated in Delaware in 1962 and maintains its principal
executive offices at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2143. Our
telephone number is (610) 644-1300.

Products

We design, manufacture and market electronic components that cover a
wide range of products and technologies. Our products primarily consist of:




o resistors, o signal processing ICs,

o tantalum capacitors, o transistors,

o multi-layer and disc ceramic capacitors (MLCCs), o voltage suppressors,

o aluminum and specialty ceramic o infrared data transceivers (IRDCs),
capacitors,

o film capacitors, o optocouplers,

o power MOSFETs, o IR sensors,

o power ICs, o strain gages and load cells, and

o diodes and rectifiers

and, to a lesser extent:


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o inductors, o plasma displays,

o connectors, o thermistors, and

o transformers, o potentiometers.


We manufacture one of the broadest lines of surface mount devices, a format for
electronic components that has evolved into the standard required by most
customers. In addition, we continue to produce components in the traditional
leaded form. We believe that we produce one of the broadest lines of discrete
electronic components available from any single manufacturer.

Passive Components

Passive components include resistors, capacitors and inductors. They
are referred to as "passive" because they do not require power to operate. These
components adjust and regulate voltage and current, store energy and filter
frequencies. We also include in this category the products and services of our
Measurements Group that employ passive components in electro-mechanical
measurements.

Resistors are basic components used in all forms of electronic
circuitry to adjust and regulate levels of voltage and current. They vary widely
in precision and cost, and are manufactured from numerous materials and in many
forms. Resistive components are classified as variable or fixed, depending on
whether or not their resistance is adjustable. Resistors can also be used as
measuring devices. We manufacture a line of thermistors, which are heat
sensitive resistors. Other types of resistive sensors are strain gages for
measurement of mechanical stress. See "Measurements Group" below.

We manufacture virtually all types of fixed resistors, both in discrete
and network forms. These resistors are produced for virtually every segment of
the resistive product market, from resistors used in the highest quality
precision instruments for which the performance of the resistor is the most
important requirement, to low-cost resistors for which price is the most
important factor.

Capacitors perform energy storage, frequency control, timing and
filtering functions in most types of electronic equipment. The more important
applications for capacitors are:

o electronic filtering for linear and switching power supplies;

o decoupling and bypass of electronic signals for integrated circuits
and circuit boards; and

o frequency control, timing and conditioning of electronic signals for
a broad range of applications.

Our capacitor products include solid tantalum surface mount chip capacitors,
solid tantalum leaded capacitors, wet/foil tantalum capacitors, MLCC capacitors,
disc ceramic capacitors, aluminum and specialty ceramic capacitors, and film
capacitors. Each capacitor product has unique physical and electrical
performance characteristics that make that type of capacitor useful for specific
applications. Tantalum and MLCC capacitors are generally used in conjunction
with integrated circuits in applications requiring low to medium capacitance
values, "capacitance" being the measure of the capacitor's ability to store
energy. The tantalum capacitor is the smallest and most stable type of capacitor
for its range of capacitance and is best suited for applications requiring
medium capacitance values. MLCC capacitors, on the other hand, are more
cost-effective for applications requiring lower capacitance. Disc ceramic
capacitors are used for high voltage applications. Aluminum capacitors are used
for high capacitance applications.

Inductors use an internal magnetic field to change the phase of
electric current. They are utilized in electronic circuitry to control
alternating current and voltage, and to filter out unwanted electronic signals.
They are also used in transformers to change voltage levels.

Measurements Group

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Vishay Measurements Group is a leading manufacturer of products for
precision measurement of mechanical strains. Our products include strain gages,
load cells, force measurement sensors, displacement sensors, and photoelastic
sensors. These products are used in experimental stress analysis systems, as
well as in the electronic measurement of loads (electronic scales), acceleration
and fluid pressure. The Measurements Group also provides installation
accessories for its products, instrumentation to sample and record measurement
output, and training seminars in stress analysis testing and transducer
development and manufacture.

As a result of Vishay's acquisitions in 2002, the Measurements Group
has implemented a strategy of vertical market integration, with a product range
from resistance strain gages, to transducers (the metallic structures to which
strain gages are cemented), to the electronic instruments and systems that
measure and control output of the transducers. Vishay Measurements Group now has
two operating divisions: Vishay Micro-Measurements (for strain gages,
instruments and PhotoStress products) and Vishay Transducers (for load cells,
weigh modules, instruments and weighing systems).

Active Components

Our active electronic components include both discrete devices and
integrated circuits (ICs). They are referred to as "active" because they require
power to function. Discrete devices are single components or an arrangement of
components that generate, control, regulate and amplify or switch electronic
signals or energy. Examples of our discrete active components include diodes,
rectifiers, transient voltage suppressors, transistors and power MOSFETs. These
devices are interconnected with passive components or other active components to
create an electronic circuit. Our IC devices consist of a number of active and
passive components interconnected on a single chip to perform a specific
function. Examples of our integrated circuits include power ICs, motor control
ICs and signal processing ICs. Our discrete active components and ICs are
manufactured and marketed primarily through our majority-owned Siliconix
subsidiary, our Telefunken unit and the General Semiconductor business.

We also include in the category of active components our line of
optoelectronic components, manufactured and marketed by our Telefunken unit, and
the infrared components business acquired from Infineon A.G.

Discrete Devices

Diodes and rectifiers are used to convert electrical currents from
alternating current (AC) into direct current (DC) by conducting electricity in
one direction and blocking it in the reverse direction. Because electrical
outlets carry AC while the vast majority of electronic devices use DC,
rectifiers are used in a wide variety of applications. We offer a broad line of
diodes and rectifiers with differing power, speed, cost, packaging and
conversion (half wave or full wave) characteristics. Our rectifiers include a
series of high voltage devices that have been optimized for power correction
circuits.

Transient voltage suppressors protect electronic circuits by limiting
voltage to a safe level. Examples of transient events that could damage
unprotected circuits include static electricity charges and natural or induced
lightning. Voltage suppressors protect circuits by absorbing large amounts of
energy for short periods of time. We offer a broad range of state-of-the-art
transient voltage suppressors for use in most modern electronic equipment.

Small signal diodes and transistors perform amplification, signal
blocking, routing and switching functions at lower current levels. Our
small-signal transistors range from the older junction field-effect transistors
(JFETs), to newer products such as those based upon double-diffused metal oxide
semiconductor (DMOS) technology.

Discrete power MOSFETs are specialized field-effect transistors used to
switch and manage power in a broad range of electronic devices. These include
particularly low-voltage applications such as cell phones, portable and desktop
computers, automobiles, instrumentation and industrial applications. Our
innovative "trench" power MOSFET technology offers very high cell density, very
low on-resistance and optimized switching parameters for high frequency DC-DC
power conversion. Power MOSFETs conserve power and help prevent components from
heating up.

Integrated Circuits

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Power ICs are used in applications such as cell phones, where an input
voltage from a battery or other supply source must be switched, interfaced or
converted to a level that is compatible with logic signals used by
microprocessors and other digital components. Our ICs are designed to operate at
higher frequencies without compromising efficiencies. Often our power MOSFETs
and power ICs can be used together as chip sets with complementary performance
characteristics optimized for a specific application.

Motor control ICs control the starting, speed or position of electric
motors, such as the head positioning and spindle motors in hard disk drives.

Signal processing ICs are used for analog switching and multiplexing in
devices that either receive or output analog (non-digital) signals. A recent
application of this technology is in broadband communications devices such as
DSL modems.

Optoelectronics

Our line of optoelectronic components includes photo emitters and
detectors, optocouplers, IRDCs and LEDs.

Our photo detectors are light-sensitive semiconductor devices, and
include linear photo diodes for light measurement, photo-transistors for light
switching applications in printers, copiers, facsimile machines, vending
machines and automobiles, and high speed photo PIN diodes specially designed for
infrared data transfer. Our photo detector products are available in a wide
variety of sensitivity angles, light sensitivities, daylight filters and
packaging shapes. Our infrared photo emitters are used for optical switching and
data transfer applications, often in conjunction with our photo detectors, and
in devices like infrared remote controls for televisions.

An optocoupler consists of a light emitting diode and a receiver facing
each other through an insulation medium inside a light-isolated housing. The
receiver may either be a photodetector or a pair of MOSFETs, and in the latter
case the device is referred to as a solid-state relay (SSR). The function of an
optocoupler is to electrically isolate input and output signals. Our
optocouplers are used in switchable power supplies, safety circuitry and
programmable controllers for computer monitors, consumer electronics,
telecommunications equipment and industrial systems.

IRDCs consist of a detector photo diode, an infrared light emitting
diode and a control IC. IRDCs are used for short range, two-way wireless,
infrared data transfer between electronic devices such as mobile phones and
other telecommunications equipment, computers and personal digital assistants
(PDAs). LEDs are light emitting diodes used as light indicators in a variety of
industries.

Packaging

We have taken advantage of the growth of the surface mount component
market, and we are an industry leader in designing and marketing surface mount
devices. Surface mount devices adhere to the surface of a circuit board rather
than being secured by leads that pass through holes to the back side of the
board. Surface mounting provides distinct advantages over through-hole mounting.
For example, surface mounting allows the placement of more components on a
circuit board, as well as on both sides of the board. This is particularly
desirable in applications such as hand held computers and cell phones where
there is a continuing design trend towards product miniaturization. Surface
mounting also facilitates automated product assembly, resulting in lower
production costs for equipment manufacturers than those associated with leaded
or through-hole mounted devices. We believe that we are a market leader in the
development and production of a wide range of surface mount devices, including:





o thick film chip resistors, o wirewound chip resistors,

o thick film resistor networks and arrays, o power strip resistors,

o metal film leadless resistors (MELFs), o bulk metal foil chip resistors,


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o molded tantalum chip capacitors, o current sensing chips,

o coated tantalum chip capacitors, o chip inductors,

o multi-layer ceramic chip capacitors, o chip transformers,

o thin film chip resistors, o chip trimmers,

o thin film networks, o NTC chip thermistors,

o certain diodes and transistor products, o PTC chip thermistors, and

o strain gages.



We also provide a number of component packaging styles to facilitate automated
product assembly by our customers.

Military Qualifications

We have qualified certain products under various military
specifications, approved and monitored by the United States Defense Electronic
Supply Center (DESC), and under certain European military specifications. DESC
qualification levels are based in part upon the rate of failure of products. In
order to maintain the classification level of a product, we must continuously
perform tests on the product and the results of these tests must be reported to
DESC. If the product fails to meet the requirements for the applicable
classification level, the product's classification may be reduced to a lower
level. Products from some of our United States manufacturing facilities
experience a reduction in product classification levels from time to time.
During the time that the DESC classification level is reduced for a product with
military application, net sales and earnings attributable to that product may be
adversely affected.

Customers

We sell our products primarily to original equipment manufacturers
(OEMs), electronic manufacturing services (EMS) companies, which manufacture for
OEMs on an outsourcing basis, and independent distributors that maintain large
inventories of electronic components for resale to OEMs.

To better serve our customers, we maintain production facilities in
regions where we market the bulk of our products, principally in the United
States, Germany, France, the United Kingdom and more recently, Asia. We work
with our customers so that our products are incorporated into the design of
electronic equipment at the research and prototype stages. We also employ a
staff of application and field engineers to assist our customers, independent
manufacturers' representatives and distributors in solving technical problems
and developing products to meet specific needs.

Our largest customers vary from year to year, and no customer has
long-term commitments to purchase our products. During 2002, no one customer
accounted for more than 10% of our sales.

During 2002, approximately 31% of our net sales were attributable to
customers in the Americas, approximately 31% were attributable to customers in
Europe, and approximately 38% were attributable to customers in Asia.

Marketing

Our products are marketed through independent manufacturers'
representatives compensated solely on a commission basis, by our own sales
personnel and by independent distributors. We have regional sales personnel in


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several North American locations that make sales directly to OEMs and provide
technical and sales support for independent manufacturers' representatives
throughout the United States, Mexico and Canada. As noted, we also use
independent distributors to resell our products. Outside North America, we use
similar channels to sell our products worldwide.

Research and Development

Many of our products and manufacturing techniques, technologies and
packaging methods have been invented, designed and developed by our engineers
and scientists. We maintain strategically placed design centers where proximity
to customers enables us to more easily gauge and satisfy the needs of local
markets. These design centers are located predominantly in the United States,
France, Germany, Israel, the People's Republic of China, the Republic of China
(Taiwan) and South Korea.

We also maintain research and development staffs and promote programs
at a number of our production facilities to develop new products and new
applications of existing products, and to improve manufacturing techniques. This
decentralized system encourages individual product development at individual
manufacturing facilities that occasionally have applications at other
facilities. Company research and development costs (exclusive of purchased
in-process research and development) were approximately $37.1 million for 2002,
$30.2 million for 2001, and $37.1 million for 2000. These amounts include
expenditures of our Siliconix subsidiary of $19.3 million, $17.2 million and
$21.0 million in 2002, 2001 and 2000, respectively, principally for the
development of new power products and power ICs. These amounts do not include
substantial expenditures for the development and manufacturing of machinery and
equipment for new processes and for cost reduction measures.

Although we have numerous United States and foreign patents covering
certain of our products and manufacturing processes, no particular patent is
considered material to our business.

Sources of Supplies

Although most materials incorporated in our products are available from
a number of sources, certain materials, particularly tantalum and palladium, are
available only from a relatively limited number of suppliers.

Tantalum

We are a major consumer of the world's annual production of tantalum.
Tantalum, a metal purchased in powder or wire form, is the principal material
used in the manufacture of tantalum capacitors. There are currently three major
suppliers that process tantalum ore into capacitor grade tantalum powder. Due to
the strong demand for our tantalum capacitors and difficulty in obtaining
sufficient quantities of tantalum powder from our suppliers, we stockpiled
tantalum ore in 2000 and early 2001. During 2001 and 2002, we and our
competitors experienced a significant decline in the tantalum capacitor business
as well as significant decreases in the market prices for tantalum. As a result,
we recorded in costs of products sold write-downs of $25,700,000 and
$52,000,000, respectively, on tantalum inventories during the years ended
December 31, 2002 and 2001. We also recorded a loss on future purchase
commitments of $106,000,000 for the year ended December 31, 2002. If the
downward pricing trend were to continue, the Company could again be required to
write down the carrying value of its tantalum inventory and record additional
losses on its long-term purchase commitments.

We have two agreements with Cabot Corporation for the supply of
tantalum powder, a July 2000 agreement and a November 2000 agreement. Our
purchase commitments with Cabot were entered into at a time when market demand
for tantalum capacitors was high and tantalum powder was in short supply. With
the decline in market demand and prices for tantalum, we began the process of
negotiating modifications to the agreements with Cabot during 2001. Our major
competitors in the tantalum capacitor business were also seeking modifications
to their contracts with Cabot. In June 2002, following the prior initiation of
legal proceedings by Cabot, we and Cabot agreed to make certain modifications to
the supply agreements. These included price reductions, the extension of the
term of one of the contracts, and the regular scheduling of our purchase
commitments.

Palladium

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Palladium, a metal used to produce multi-layer ceramic capacitors, is
currently found primarily in South Africa and Russia. Palladium is a commodity
product that is subject to price volatility. The price of palladium fluctuated
in the range of approximately $222 to $1,090 per troy ounce during the three
years ended December 31, 2002, and as of December 31, 2002, the price of
palladium was $236 per troy ounce. During the years ended December 31, 2002 and
2001, respectively, we recorded in costs of products sold write-downs on
palladium inventories of $1,700,000 and $18,000,000.

Inventory and Backlog

We manufacture both standardized products and those designed and
produced to meet customer specifications. We maintain an inventory of resistors
and other standardized components. Backlogs of outstanding orders for our
products were $407.6 million, $337.9 million and $773.1 million, respectively,
at December 31, 2002, 2001 and 2000. The backlog at December 31, 2002 includes
$49.8 million of backlog attributable to the business of BCcomponents, which was
acquired in December 2002. The increase in backlog at December 31, 2002,
exclusive of the business of BCcomponents, as compared to the prior year,
primarily reflects the increase in demand during 2002 for our active components
as a result of the increase in computer notebooks and feature rich cell phones
with multiple functions, especially in Asia. The passive components backlog has
decreased in 2002 due to a global slowdown in the electronics industry,
particularly in the general personal computer and cell phone markets.

Many of the orders that comprise our backlog may be canceled by
customers without penalty. Customers may on occasion double and triple order
components from multiple sources to ensure timely delivery when backlog is
particularly long. Customers often cancel orders when business is weak and
inventories are excessive, a phenomenon that we have experienced in the current
economic slowdown. Therefore, the amount of our backlog may exceed the level of
orders that will ultimately be delivered. Our results of operations could be
adversely impacted if customers cancel a material portion of orders in our
backlog.

Competition

We face strong competition in various product lines from both domestic
and foreign manufacturers that produce products using technologies similar to
ours. Our main competitors for tantalum capacitors are KEMET Corporation, AVX
Corporation and NEC Electronics, Inc. For MLCC capacitors, our principal
competitors are KEMET, AVX, Murata and TDK Corp. For thick film chip resistors,
our major competitors include Rohm Corp., Koa Speer Electronics Inc. and Yageo
Corporation. For wirewound and metal film resistors, the principal competitors
are I.R.C. Inc., Rohm Corp. and Ohmite Manufacturing Company. For active
components, main competitors include International Rectifier, Philips, N.V., ON
Semiconductor, Rohm Corp., Motorola, Inc., Fairchild Semiconductor Corp., Maxim,
Shindengen Electric Manufacturing Co. Ltd., Sanken Electric Co. Ltd., ST
Microelectronics N.V. and Samsung Co., Ltd. There are many other companies that
produce products in the markets in which we compete.

Our competitive position depends on our product quality, know-how,
proprietary data, marketing and service capabilities and business reputation, as
well as on price. We compete for sales of certain products on the basis of our
marketing and distribution network, which provides a high level of customer
service. For example, we work closely with our customers to have our components
incorporated into their electronic equipment at the early stages of design and
production and maintain redundant production sites for some of our products to
ensure an uninterrupted supply of products. We have also established a National
Accounts Management Program, which provides our largest customers with one
national account executive who can cut across business unit lines for sales,
marketing and contract coordination. In addition, the breadth of our product
offerings enables us to strengthen our market position by providing customers
with "one-stop" access to one of the broadest selections of passive electronic
components available directly from a manufacturing source.

Manufacturing Operations

We strive to balance the location of our manufacturing facilities. In
order to better serve our customers, we maintain some of our production
facilities in regions where we market the bulk of our products, such as the
United States, Germany, France, the United Kingdom, and more recently, Asia. To
maximize production efficiencies, we seek whenever practicable to establish
manufacturing facilities in countries, such as the Czech Republic, Hungary,

11


India, Israel, Malaysia, Mexico, the People's Republic of China, the
Philippines, Portugal, and the Republic of China (Taiwan), where we can take
advantage of lower labor and tax costs and, in the case of Israel, to take
advantage of various government incentives, including grants and tax relief.

Some of our most sophisticated manufacturing operations are the
production of power semiconductor components. This manufacturing process
involves two phases of production: wafer fabrication and assembly (or
packaging). Wafer fabrication subjects silicon wafers to various thermal,
metallurgical and chemical process steps that change their electrical and
physical properties. These process steps define cells or circuits within
numerous individual devices (termed "dies" or "chips") on each wafer. Assembly
is the sequence of production steps that divides the wafer into individual chips
and encloses the chips in structures (termed "packages") that make them usable
in a circuit. Both wafer fabrication and assembly phases incorporate wafer level
and device level electrical testing to ensure that device design integrity has
been achieved.

At December 31, 2002, approximately 32% of our identifiable assets were
located in the United States, approximately 36% were located in Europe,
approximately 14% were located in Israel, and approximately 18% were located in
Asia. In the United States, our manufacturing facilities are located in
California, Connecticut, Indiana, Maine, Maryland, New York, Nebraska, North
Carolina, Pennsylvania, Rhode Island, South Dakota, Vermont, and Wisconsin. In
Europe, our main manufacturing facilities are located in Germany and France. We
also have manufacturing facilities in Austria, Belgium, the Czech Republic,
Hungary, India, Israel, Malaysia, Mexico, the Netherlands, the People's Republic
of China, the Philippines, Portugal and the Republic of China (Taiwan). Over the
past several years, we have invested substantial resources to increase capacity
and to maximize automation in our plants, which we believe will further reduce
production costs.

We are aggressively undertaking to have the quality systems at most of
our major manufacturing facilities approved under the ISO 9001 international
quality control standard. ISO 9001 is a comprehensive set of quality program
standards developed by the International Standards Organization. A majority of
our manufacturing operations have already received ISO 9001 approval and others
are actively pursuing such approval.

In 2002, we continued the implementation of our strategy to shift
manufacturing emphasis to higher automation in higher labor cost regions and to
relocate a fair amount of production to regions with skilled workforces and
relatively lower labor costs. As a result, we incurred restructuring costs in
the year ended December 31, 2002 associated with the downsizing of manufacturing
facilities in Europe and the United States. We may continue to incur such
expenses in 2003.

See Note 16 to our Consolidated Financial Statements, "Business Segment
and Geographic Area Data," for financial information by geographic area.

Israeli Government Incentives

We have substantial manufacturing operations in Israel, where we
benefit from the government's employment and tax incentive programs designed to
increase employment, lower wage rates and increase our ability to attract a
highly-skilled labor force, all of which have contributed substantially to our
growth and profitability. For the year ended December 31, 2002, sales of
products manufactured in Israel accounted for approximately 13.0% of our net
sales.

Under the terms of the Israeli government's incentive programs, once a
project is approved, the recipient is eligible to receive the benefits of the
related grants for the life of the project, so long as the recipient continues
to meet preset eligibility standards. None of our approved projects has ever
been cancelled or modified, and we have already received approval for a majority
of the projects contemplated by our capital expenditure program. However, as a
result of the recent economic downturn, we were forced to lay off a significant
number of employees in Israel in 2001. In 2002, the Israeli government initially
withheld certain grant monies claiming that we had not maintained employment at
the required minimum levels; however, we were able to settle our dispute in the
fourth quarter and the government agreed to continue making grant payments to
us. While the number of employees continues to satisfy the eligibility
requirements for our Israeli government grants, economic circumstances could
compel future additional layoffs. Also, over the past few years, the Israeli
government has scaled back or discontinued some of its incentive programs. There
can be no assurance that we will maintain our eligibility for existing projects
or that in the


12


future the Israeli government will continue to offer new incentive programs
applicable to us or that, if it does, such programs will provide the same level
of benefits we have historically received or that we will continue to be
eligible to take advantage of them. Because we have received approvals for most
projects currently contemplated, we do not anticipate that cutbacks in the
incentive programs for new projects would have an adverse impact on our earnings
and operations for at least several years.

We might be materially adversely affected if events were to occur in
the Middle East that interfered with our operations in Israel. However, we have
never experienced any material interruption in our Israeli operations in our 32
years of operations there, in spite of several Middle East crises, including
wars.

Environment, Health and Safety

We have adopted an Environmental Health and Safety Corporate Policy
that commits us to achieve and maintain compliance with applicable environmental
laws, to promote proper management of hazardous materials for the safety of our
employees and the protection of the environment, and to minimize the hazardous
materials generated in the course of our operations. This policy is implemented
with accountability directly to the Chairman of the Board of Directors. In
addition, our manufacturing operations are subject to various federal, state and
local laws restricting discharge of materials into the environment.

We are not involved in any pending or threatened proceedings that would
require curtailment of our operations. We continually expend funds to ensure
that our facilities comply with applicable environmental regulations. In regard
to all of our facilities, we have completed our undertaking to comply with
environmental regulations relating to the elimination of chlorofluorocarbons
(CFCs) and ozone depleting substances (ODS) pursuant to the Clean Air Act
amendments of 1990. We have completely eliminated the use of CFCs and ODS in our
manufacturing processes, and all facilities are currently in compliance with the
Clean Air Act.

While we believe that we are in material compliance with applicable
environmental laws, we cannot accurately predict future developments and do not
necessarily have knowledge of past occurrences on sites that we currently
occupy. More stringent environmental regulations may be enacted in the future,
and we cannot determine the modifications, if any, in our operations that any
such future regulations might require, or the cost of compliance with such
regulations. Moreover, the risk of environmental liability and remediation costs
is inherent in the nature of our business and, therefore, there can be no
assurance that material environmental costs, including remediation costs, will
not arise in the future.

We have been named a Potentially Responsible Party (PRP) at nine
Superfund sites, including two Siliconix facilities, and have become responsible
for certain obligations as a PRP in connection with our acquisition of General
Semiconductor. We expend minimal amounts in connection with several of these
sites and do not expect costs associated with the others to be material.

General Semiconductor has also been named as a defendant in two actions
in the United States District Court for the Eastern District of New York in
connection with its former operations at a facility in Hicksville, New York. The
plaintiffs in these actions allege that they have suffered personal injury and
property damage as a result of the facility's operations. Although we will
vigorously defend these actions, we do not currently possess sufficient
information to estimate reasonably the amount of or timing of liabilities that
may be associated with these litigations. It is our policy to record appropriate
liabilities for environmental matters when damage claim payments are probable
and the costs can be reasonably estimated.

The ultimate cost of site cleanup is difficult to predict given the
uncertainties regarding the extent of the required cleanup, the interpretation
of applicable laws and regulations and alternative cleanup methods. Based upon
our experience with the foregoing environmental matters, we have concluded that
there is at least a reasonable possibility that we will incur remedial costs in
the range of $30 million to $35 million. As of December 31, 2002, we concluded
that the best estimate within this range is $34.4 million, which is included in
other long-term liabilities on the Consolidated Balance Sheet. The majority of
the environmental reserve is due to the acquisitions of General Semiconductor,
Inc. and BCcomponents. In view of our financial position and reserves for
environmental matters of $34.4 million, we have concluded that any potential
payment of such estimated amounts will not have a material adverse effect on our
consolidated financial position, results of operations or liquidity.



13


With each acquisition, we attempt to identify potential environmental
concerns and to minimize, or obtain indemnification for, the environmental
matters we may be required to address. In addition, we establish reserves for
specifically identified potential environmental liabilities. We believe that the
reserves we have established are adequate. Nevertheless, we often unavoidably
inherit certain pre-existing environmental liabilities, generally based on
successor liability doctrines. Although we have never been involved in any
environmental matter that has had a material adverse impact on our overall
operations, there can be no assurance that in connection with any past or future
acquisition we will not be obligated to address environmental matters that could
have a material adverse impact on our operations.

Employees

As of December 31, 2002, we employed approximately 25,250 full time
employees, of whom approximately 20,730 were located outside the United States.
Some of our employees outside the United States are members of trade unions and
employees at one small U.S. facility are represented by a union. Our
relationship with our employees is good. However, no assurance can be given
that, if we continue to restructure our operations in response to changing
economic conditions, labor unrest or strikes, especially at European facilities,
will not occur. See "Legal Proceedings."

Company Information and Website

We file annual, quarterly, and current reports, proxy statements, and
other documents with the Securities and Exchange Commission (SEC) under the
Securities Exchange Act of 1934 (the Exchange Act). The public may read and copy
any materials that we file with the SEC at the SEC's Public Reference Room at
450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Also, the SEC maintains an Internet website that contains reports, proxy and
information statements, and other information regarding issuers, including us,
that file electronically with the SEC. The public can obtain any documents that
we file with the SEC at http://www.sec.gov.

In addition, our company website can be found on the Internet at
www.vishay.com. The website contains information about us and our operations.
Copies of each of our filings with the SEC on Form 10-K, Form 10-Q and Form 8-K,
and all amendments to those reports, can be viewed and downloaded free of charge
as soon as reasonably practicable after the reports and amendments are
electronically filed with or furnished to the SEC. To view the reports, access
www.vishay.com, click on Company Info, then Investor Relations and then SEC
Filings.

Any of the above documents can also be obtained in print by any
shareholder who requests them from our Investor Relations Department at the
following address:

Corporate Investor Relations
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355-2143


14


Item 2. PROPERTIES

As of December 31, 2002, we maintained approximately 74 manufacturing
facilities. The principal locations of such facilities, along with available
space including administrative offices, are:

Approx. Available
Owned Locations Space (Square Feet)
- --------------- -------------------

United States
-------------
Columbus and Norfolk, NE* 298,000
Sanford, ME 225,000
Santa Clara, CA 220,000
Grafton and Oconto, WI* 165,000
Wendell and Statesville, NC* 159,000
Monroe, CT 91,000
Greencastle, IN 90,000
Malvern, PA 79,000

- --------------------
* 2 locations

Non-U.S.
--------
Israel (5 locations) 1,060,000
Germany (8 locations) 781,000
France (4 locations) 414,000
Republic of China (Taiwan) (2 locations) 391,000
Czech Republic (5 locations) 368,000
Hungary (2 locations) 325,000
Portugal 301,000
Netherlands 286,000
People's Republic of China (2 locations) 211,000
Belgium (2 locations) 180,000
Austria 153,000
Philippines 149,000
India 140,000
Malaysia 115,000

We own an additional 288,000 square feet of manufacturing facilities
located in Maryland, New York, Rhode Island, South Dakota, Vermont and Mexico.

Leased facilities in the United States include 217,000 square feet of
space located in California, Massachusetts, New York and South Dakota. Foreign
leased facilities consist of 778,000 square feet in China, 127,000 square feet
in Mexico, 13,000 square feet in the United Kingdom, 196,000 square feet in
Germany, 75,000 square feet in the Czech Republic, 39,000 square feet in Israel
and 41,000 square feet in Sweden.

In the opinion of management, our properties and equipment generally
are in good operating condition and are adequate for our present needs. We do
not anticipate difficulty in renewing existing leases as they expire or in
finding alternative facilities.

Item 3. LEGAL PROCEEDINGS

From time to time we are involved in routine litigation incidental to
our business. Management believes that such matters, either individually or in
the aggregate, should not have a material adverse effect on our business or
financial condition.


15



Our 80.4% owned subsidiary, Siliconix, is a party to two environmental
proceedings. The first involves property that Siliconix vacated in 1972. In July
1989, the California Regional Water Quality Control Board (RWQCB) issued Cleanup
and Abatement Order No. 89-115 both to Siliconix and the current owner of the
property. The Order alleged that Siliconix contaminated both the soil and the
groundwater on the property by the improper disposal of certain chemical
solvents. The RWQCB considered both parties to be liable for the contamination
and sought to have them decontaminate the site to acceptable levels. Siliconix
subsequently reached a settlement of this matter with the current owner of the
property. The settlement provided that the current owner will indemnify
Siliconix and its employees, officers, and directors against any liability that
may arise out of any governmental agency actions brought for environmental
cleanup of the subject site, including liability arising out of RWQCB Order No.
89-115, to which Siliconix remains nominally subject.

The second proceeding involves Siliconix's Santa Clara, California
facility, which Siliconix has owned and occupied since 1969. In February 1989,
the RWQCB issued Cleanup and Abatement Order No. 89-27 to Siliconix. The Order
is based on the discovery of contamination of both the soil and the groundwater
on the property by certain chemical solvents. The Order calls for Siliconix to
specify and implement interim remedial actions and to evaluate final remedial
alternatives. The RWQCB issued a subsequent order requiring Siliconix to
complete the decontamination. Siliconix has substantially completed its
compliance with the RWQCB's orders.

Our subsidiary General Semiconductor has been named a PRP at several
Superfund sites and as a defendant in two lawsuits in the United States District
Court for the Eastern District of New York. See "Environment, Health and
Safety."

In February and March 2001, several purported class action complaints
were filed in the Delaware Court of Chancery and the California Superior Court
against us, Siliconix and the directors of Siliconix in connection with our
proposal in February 2001 to purchase all issued and outstanding shares of
Siliconix that we did not already own. The class actions alleged that our
proposed offer was unfair and a breach of fiduciary duty. One of the Delaware
class actions also alleged that we had usurped Siliconix inventory and patents,
appropriated Siliconix's separate corporate identity, and obtained a
below-market loan from Siliconix. The actions sought injunctive relief, damages
and other relief. The Delaware Chancery Court denied a preliminary injunction
motion seeking to enjoin our tender offer, which was commenced in May 2001 but
not successfully completed. In December 2002, the Delaware Chancery Court
dismissed without prejudice the Delaware litigation. Also in December 2002, the
plaintiffs in the action filed in the California Superior Court filed a motion
for dismissal of the action without prejudice. Defendants have consented to that
motion, which is still pending.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


16



Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information regarding our
executive officers as of March 31, 2003.

Name Age Positions Held
Felix Zandman* 74 Chairman of the Board and Chief
Executive Officer

Avi D. Eden* 55 Vice-Chairman of the Board, Executive
Vice President and General Counsel

Gerald Paul* 54 Chief Operating Officer, President and
Director

Marc Zandman 41 Vice-Chairman of the Board,
President-Vishay Israel Ltd.

Richard N. Grubb* 56 Executive Vice President, Treasurer,
Chief Financial Officer and Director

Robert A. Freece* 62 Senior Vice President and Director

William J. Spires 61 Vice President and Secretary

* Member of the Executive Committee of the Board of Directors.

Dr. Felix Zandman, a founder of the Company, has been the Chief
Executive Officer and a Director of the Company since its inception. Dr. Zandman
had been President of the Company from its inception until March 16, 1998, when
Dr. Gerald Paul was appointed President of the Company. Dr. Zandman has been
Chairman of the Board since March 1989.

Avi D. Eden has been a Director and General Counsel of the Company
since June 1988, and has been Vice-Chairman of the Board and an Executive Vice
President of the Company since August 1996.

Dr. Gerald Paul has served as a Director of the Company since May 1993
and has been Chief Operating Officer and an Executive Vice President of the
Company since August 1996. On March 16, 1998, Dr. Paul was appointed President
of the Company. He was President of Vishay Electronic Components, Europe from
January 1994 to August 1996. Dr. Paul has been Managing Director of Draloric
Electronic GmbH, an affiliate of the Company, since January 1991. Dr. Paul has
been employed by Draloric since February 1978.

Marc Zandman was appointed Vice-Chairman of the Board as of March 1,
2003. He has been a Director of the Company since May 2001, President of Vishay
Israel Ltd. since April 1998, and Group Vice President of Measurements Group
since August 2002. Mr. Zandman has served in various other capacities with the
Company since August 1984. He is the son of Dr. Felix Zandman, the Company's
Chief Executive Officer.

Richard N. Grubb has been a Director, Vice President, Treasurer and
Chief Financial Officer of the Company since May 1994, and has been an Executive
Vice President of the Company since August 1996. Mr. Grubb has been associated
with the Company in various capacities since 1972.

Robert A. Freece has been a Director of the Company since 1972. He was
a Vice President of the Company from 1972 until 1994, and has been a Senior Vice
President since May 1994.

17


William J. Spires has been a Vice President and Secretary of the
Company since 1981. Mr. Spires has been Vice President - Industrial Relations
since 1980 and has been employed by the Company since 1970.


18



PART II
-------

Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

Our common stock is listed on the New York Stock Exchange under the
symbol VSH. The following table sets forth the high and low sales prices for our
common stock as reported on the New York Stock Exchange Composite Tape for the
quarterly periods within the 2001 and 2002 calendar years indicated. We do not
currently pay cash dividends on our capital stock. Our policy is to retain
earnings to support the growth of our business and we do not intend to change
this policy at the present time. In addition, we are restricted from paying cash
dividends under the terms of our revolving credit agreement. See Note 6 to our
Consolidated Financial Statements. Holders of record of our common stock totaled
approximately 1,791 at March 27, 2003.



COMMON STOCK MARKET PRICES
Calendar 2001 Calendar 2002
------------------------------ -----------------------------
High Low High Low

First Quarter $22.75 $13.75 $22.50 $17.05
Second Quarter $27.98 $17.00 $26.15 $19.31
Third Quarter $25.25 $16.08 $22.00 $ 8.51
Fourth Quarter $21.88 $16.86 $15.10 $ 6.70


At March 27, 2003, we had outstanding 15,383,296 shares of Class B
common stock, par value $.10 per share, each of which entitles the holder to ten
votes. The Class B common stock generally is not transferable except in certain
very limited instances, and there is no market for those shares. The Class B
common stock is convertible, at the option of the holder, into common stock on a
share for share basis. Substantially all of such Class B common stock is owned
by Dr. Felix Zandman, our Chairman and Chief Executive Officer, the estate of
Mrs. Luella B. Slaner, a former director, and trusts for the benefit of the
grandchildren of Mrs. Slaner, either directly or beneficially.

See Item 12 for certain equity compensation information with respect to
equity compensation plans approved by security holders and equity compensation
plans not approved by security holders.



19



Item 6. SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial
information of the Company as of and for the fiscal years ended December 31,
2002, 2001, 2000, 1999 and 1998. This table should be read in conjunction with
our Consolidated Financial Statements and the related notes thereto included
elsewhere in this Form 10-K.



As of and for the Year Ended December 31,
-----------------------------------------------------------------

2002(1) 2001 (2) 2000 1999 (3) 1998 (4)
---- ---- ---- ---- ----

Income Statement Data (in thousands,
except per share amounts):

Net sales $1,822,813 $1,655,346 $2,465,066 $1,760,091 $1,572,745
Interest expense 28,761 16,848 25,177 53,296 49,038
(Loss) earnings before income taxes and
minority interest (100,045) 10,103 690,225 134,711 42,646
Income taxes (benefit) (16,900) 5,695 148,186 36,940 30,624
Minority interest 9,469 3,895 24,175 14,534 3,810
Net (loss) earnings (92,614) 513 517,864 83,237 8,212

Basic (loss) earnings per share(5) $(0.58) $0.00 $3.83 $ 0.66 $ 0.07
Diluted (loss) earnings per share(5) $(0.58) $0.00 $3.77 $ 0.65 $ 0.07
Weighted average shares outstanding - basic (5) 159,413 141,171 135,295 126,678 126,665
Weighted average shares outstanding - diluted (5) 159,413 142,514 137,463 128,233 126,797

Balance Sheet Data (in thousands):

Total assets $4,315,159 $3,951,523 $2,783,658 $2,323,781 $2,462,744
Long-term debt 706,316 605,031 140,467 656,943 814,838
Working capital 897,456 1,096,034 1,057,200 604,150 650,483
Stockholders' equity 2,358,787 2,366,545 1,833,855 1,013,592 1,002,519


- -----------------------------------------------------------------------

(1) Includes the results from January 1, 2002 of Infineon Malaysia, January 31,
2002 of Sensortronics, July 1, 2002 of Tedea Huntleigh, August 1, 2002 of
BLH/Nobel, and October 1, 2002 of Celtron. Also includes restructuring
expenses, net of taxes of $11,984,000; write-down of raw materials
inventory, net of taxes of $22,533,000; accrual of loss on long-term
purchase commitments, net of taxes of $91,160,000; and other expenses, net
of taxes, of $10,426,000 for a total of $136,103,000 ($0.85 per share).

(2) Includes the results from January 1, 2001 of Tansitor, July 27, 2001 of
Infineon U.S., November 2, 2001 of General Semiconductor, and November 7,
2001 of Mallory. Also includes restructuring expenses, net of taxes, of
$39,972,000; write-down of raw materials inventory, net of taxes, of
$57,431,000; purchased research and development (no tax effect) of
$16,000,000; and other expenses, net of taxes, of $5,373,000 for a total of
$118,776,000 ($0.84 per share).

(3) The sale of Nicolitch, S.A. and a tax rate change in Germany reduced net
earnings by $14,562,000 ($0.11 per share).

(4) Includes the results from March 1, 1998 of Siliconix and Telefunken and
special charges after taxes of $55,335,000 ($0.44 per share).

(5) Adjusted to reflect a three-for-two stock split distributed June 9, 2000, a
five-for-four stock split distributed June 22, 1999 and a 5% stock dividend
paid on June 11, 1998.



20



Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Overview

Market conditions in the electronics industry remained difficult in
2002. The continuing worldwide economic slowdown, general lack of investor
confidence, consumer ambivalence and political instabilities were reflected in
the markets we serve. With regard to particular industries in 2002, our
management perceived stability in the automotive market, continuing weakness in
the markets for telecom equipment and consumer products generally, and signs of
modest recovery in computer laptops and game consoles. Geographically, our
business in the Americas and Europe remained at depressed levels, while our
Asian business faired relatively better. Our visibility of future demand is
limited, and management cannot gauge with any confidence when the current
cyclical downturn is likely to reverse itself.

Product Demand and Pricing

Sales volume and pricing are the top line indicators of demand for our
products. Compared to the substantial drop-off in business in 2001, 2002 results
remained relatively weak but without major signs of increasing deterioration.
Sales rose slightly in 2002 as compared to 2001, with higher volumes offsetting
the effects of still declining prices. The increased volumes were due in part to
the effects of acquisition activity. Average selling prices continued their
decline in 2002, but at a rate that was less than in 2001. We experienced a
weighted average pricing decline in 2002 compared to 2001 of 9%, while the
decline for 2001 compared to 2000 was 3%.

Backlog, which is one indication of trends in customer demand, was
relatively stable in 2002 as compared to 2001, but still down substantially from
2000. In uncertain economic times, such as those we experienced in 2002 and
2001, orders are more susceptible to cancellation. Accordingly, backlog as a
measure of future sales in these circumstances becomes less reliable.

Another important indicator of demand in our industry is the
book-to-bill ratio, which is the ratio of the amount of product ordered during a
period as compared with the product that we ship during that period. A
book-to-bill ratio that is greater than one indicates that our orders are
building and that we are likely to see increasing revenues in future periods.
Conversely, a book-to-bill ratio that is less than one is an indicator of
declining demand and may foretell declining sales.

The quarter-to-quarter trends in backlog and book-to-bill ratio can
also be an important indicator of the likely direction of our business. The
following table shows the end-of-period backlog and the book-to-bill ratio for
our business as a whole during the five quarters beginning with the fourth
quarter of 2001 and through the fourth quarter of 2002. The relatively flat
backlog amounts and book-to-bill ratios hovering at or slightly below one are
consistent with a business environment that remains stagnant and with no clear
signs of recovery.



4th Quarter 2001 1st Quarter 2002 2nd Quarter 2002 3rd Quarter 2002 4th Quarter 2002
---------------- ---------------- ----------------- ---------------- ----------------

End of Period
Backlog $337,883,000 (1) $396,900,000 $421,500,000 $378,500,000 $407,600,000 (2)

Book-to-Bill Ratio 0.89 1.14 1.02 0.90 0.93


(1) Includes $70,360,000 of backlog attributable to the business of
General Semiconductor, which was acquired November 2, 2001.

(2) Includes $49,800,000 of backlog attributable to the business of
BCcomponents, which was acquired in December 2002.

Segments

Our management evaluates our operating results along the lines of two
major segments, passive components and active components. Passive components
include resistors, capacitors and inductors. These are necessary elements of all
electronic circuits and are referred to as passive because they do not require
power to



21


operate. We include in this segment our Measurements Group, which manufactures
and markets strain gages, load cells, transducers, instruments and weighing
systems. The core components of these devices are resistors that are sensitive
to various types of mechanical stress. We began our business as a manufacturer
of passive components, and this remains a significant part of our business. In
December 2002, we completed our first major acquisition in the passive segment
in over ten years with the purchase of BCcomponents Holdings B.V., a
manufacturer of a broad line of resistors and capacitors. We also completed a
series of smaller acquisitions in the Measurements Group in 2002, including
Celtron Technologies, the BLH and Nobel businesses of Thermo Electron
Corporation, Tedea-Huntleigh BV and the transducer and strain gage businesses of
Sensortronics, Inc. With these acquisitions, we established ourselves as one of
the world's leading manufacturers and suppliers of strain gage products.

We are now also one of the world's leading manufacturers of active
electronic components. These include transistors, diodes, rectifiers, certain
types of integrated circuits and optoelectronic products. These components are
referred to as active because they require power to function. We entered the
active component business in 1997 when Vishay purchased a 65% interest in
Lite-On Power Semiconductor Corporation (LPSC), a Taiwan-based company that is a
major supplier of discrete active electronic components in Asia. In March 2000,
we agreed to sell our interest in LPSC to Lite-On JV Corporation (the Lite-On
Group), the owner of the remaining 35% interest in LPSC, for consideration
consisting of cash and the assignment or transfer to Vishay of the Lite-On
Group's rights under stock appreciation rights. In 1998, we increased our entry
into the active components business with the acquisition from Daimler-Benz of
TEMIC Telefunken Microelectronics GmbH, a manufacturer of optoelectronic
components and small signal transistors, and of an 80.4% interest in Siliconix
Incorporated, a manufacturer of power integrated circuits. In 2001, we
substantially increased our presence in the active component market, first with
the acquisition in July of the optoelectronic infrared business of Infineon
A.G., and later with the acquisition in November of General Semiconductor, Inc.,
a manufacturer of rectifiers and power management components whose business is
complementary to that of Siliconix. As a percentage of our total sales, active
components were 58% in 2002, 39% in 2001 and 34% in 2000.

The passive and active segments of our business have historically
responded differently to phases of the business cycle. Having strong
capabilities in both areas not only gives us a broad line of products to offer
our customers, it also smoothes, to some extent, the business swings that we
experience. When business slows down, active components are usually first to
feel the effects of the downturn that are later experienced by passive
components. Similarly, when business begins to increase, our semiconductor
products usually lead the recovery, followed some time later by resistors,
inductors and capacitors. Results in 2002 were on the whole better in the active
segment than the passive segment, but results and trends varied for products
within the two segments. Our resistor and inductor business stabilized in 2002,
but capacitors continued to deteriorate. As in the past, specialty products
performed reasonably well despite the economic downturn, but commodity products
continued to suffer from strong pricing pressures. The active side of our
business evidenced improvement in 2002, mainly at Siliconix and to a lesser
extent in our remaining semiconductor operations. Even in the active segment,
however, backlog and book-to-bill ratios do not reflect strong near-term
recovery.

The following table shows our sales and book-to-bill ratios broken out
by segment for the five quarters beginning with the fourth quarter of 2001 and
through the fourth quarter of 2002:



Sales ($)/
Book-to-bill 4th Quarter 2001 1st Quarter 2002 2nd Quarter 2002 3rd Quarter 2002 4th Quarter 2002
------------ ---------------- ---------------- ---------------- ---------------- ----------------

Passive $178,295,000 $184,572,000 $187,430,000 $196,702,000 $198,542,000
Components 0.83 1.02 0.98 0.96 1.00

Active $202,856,000 (1) $249,568,000 $270,447,000 $274,717,000 $260,835,000
Components 0.94 (1) 1.22(2) 1.04 0.85 0.88


(1) Includes $51,274,000 attributable to General Semiconductor for
active components. Excluding General Semiconductor, the book-to-bill
ratio for active components during the fourth quarter of 2001 would
have been 0.95.

(2) The book-to-bill ratio for the active components for the quarter
ended March 31, 2002 reflected, in part, an unusual spike in orders
in March 2002.

22


The increase in backlog in the actives segment reflects the increase in demand
for computer notebooks and feature rich cell phones with multiple functions,
especially in Asia. The decrease in passives backlog is due to the global
slowdown in the electronics industry, particularly in the general personal
computer and cell phone markets.

Cost and Inventory Management

We place a strong emphasis on reducing our costs. One way we do this is
by moving production to the extent possible from high labor cost markets, such
as the United States and Western Europe, to lower labor cost markets, such as
Israel, Mexico, the Republic of China (Taiwan), the People's Republic of China
and Eastern Europe. The percentage of our total headcount in lower labor cost
countries is a measure of the extent to which we are successful in implementing
this program. This percentage was 65% at the end of 2002 as compared to 61% at
the end of 2001 and 57% at the end of 2000. We expect that this trend will
continue with the acquisition in December 2002 of BCcomponents, where we intend
to move production to lower cost jurisdictions, primarily in Asia.

We are placing particular emphasis on cost reduction in our capacitor
lines, which have been hardest hit by the current downturn and where the
business continues to suffer from worldwide overcapacity. We expect to complete
the transfer of our power capacitor production from Western Europe to the Czech
Republic by mid-year and to begin moving our molded tantalum capacitor business
to the People's Republic of China. We also expect to consolidate our existing
film capacitor line within the newly acquired business of BCcomponents.

We also focus on our inventory turns as a measure of how well we are
managing our inventory. We define inventory turns for a financial reporting
period as our cost of products sold for that period divided by our average
inventory for the period. A higher level of inventory turns reflects more
efficient use of our capital. In 2002, inventory turns improved to 2.52 from
2.26 in 2001, which we attribute to somewhat improved selling conditions and
enhanced selling efficiencies implemented during the year.

Israeli Government Incentives

Our production facilities in Israel benefit from incentives offered by
the Israeli government for creation of jobs and capital investment in that
country. These benefits take the form of government grants and reduced tax rates
that are lower than those in the United States. These reduced tax rates apply to
projects specifically approved by the Israeli government and, depending on
project size, are available for periods of ten or fifteen years. Due to the
write-down of inventories and the loss on long-term purchase commitments in
2002, the application of the Israeli tax rates rather than United States tax
rates resulted in an increase in net loss of $24,769,000. In 2001 and 2000,
lower tax rates in Israel, as compared to the statutory rate in the United
States, resulted in an increase in net earnings of $3,009,000 and $89,745,000,
respectively.

Israeli government grants are awarded to specific projects. These
grants are intended to promote sales and employment in Israel's industrial
sector and are conditioned on the recipient maintaining certain prescribed
employment levels. Grants are paid when the related projects become operational,
and the Israeli government approves the project. Israeli government grants,
recorded as a reduction in the costs of products sold, were $17,322,000,
$19,064,000 and $15,721,000 in the years 2002, 2001 and 2000, respectively. At
December 31, 2002, our balance sheet reflected $42,345,000 in deferred grant
income.

During the second quarter of 2002, the government of Israel informed us
that since the headcount in our Israeli subsidiaries decreased significantly
over the previous 18 months, the government intended to withhold a $15,000,000
grant otherwise due to us. The grant, which was made by the Israeli government
under an economic stimulus program, was conditioned in part on the employment
levels at certain of our Israeli facilities. The Israeli government argued that
we had not maintained employment at the required minimum levels. During the
fourth quarter of 2002, we settled our dispute with the government of Israel by
negotiating certain of our commitments, and the government agreed to continue
making grant payments to us. We therefore recorded a catch up adjustment of
approximately $1,070,000 of grant income for the fourth quarter of 2002 and
reversed the allowances against the grant and deferred income reflected on the
September 30, 2002 balance sheet.

23


If we were no longer able to maintain the required level of employment
in the future, we could be required to return some grant funds that were
previously awarded to us. The effect of the return of these funds would be to
reduce our income in future years. Also, if the current business climate
continues, we might not initiate new projects that qualify for grants or reduced
tax rates or the Israeli government could curtail or eliminate the programs from
which we have benefited in the past.

Write-Downs of Inventory and Purchase Commitments

Tantalum is the principal material used in the manufacture of tantalum
capacitors. We generally purchase this metal in powder or wire form, although in
2000 and early 2001, when we perceived possible supply shortages, we also
stockpiled quantities of tantalum ore. In July and November of 2000, we entered
into purchase contracts with Cabot Corporation for tantalum powder and wire that
committed us to minimum purchases of these materials at fixed prices through
2005. We regularly utilize tantalum powder and wire in the production of
tantalum capacitors but have not used our stockpile of tantalum ore since 2000.
Palladium is a precious metal used in the production of multi-layer ceramic
capacitors that we purchase under short-term contracts.

In 2001, as a result of the general downturn in the electronics
business, we experienced a significant decrease in capacitor sales. Prices of
tantalum ore, powder and wire and of palladium also experienced significant
declines. Accordingly, we recorded write-downs of our raw material inventories
of these metals including $38,000,000 for tantalum ore, $14,000,000 for tantalum
wire and powder and $18,000,000 for palladium.

In June 2002, following initiation of a lawsuit by Cabot regarding its
tantalum supply contracts with Vishay, we agreed with Cabot to modify the
contracts, including reducing prices, providing for purchases at regular
intervals and extending one of the contracts through 2006. In the fourth quarter
of 2002, our management concluded that the depressed prices for tantalum were
not attributable to temporary imbalances in distributor inventories for tantalum
capacitors and that the prices for tantalum were likely to remain at their
currently depressed levels for the foreseeable future. Also during the fourth
quarter, one of our competitors settled its dispute with Cabot regarding
long-term tantalum purchase commitments at prices that we understand are in the
same range as the prices under our June 2002 settlement with Cabot. Our
management therefore concluded that it was unlikely to obtain further price
concessions from Cabot. Accordingly, we determined that it was appropriate to
accrue a loss of our purchase commitments under our supply contracts with Cabot
to reflect the difference between the prices that we are required to pay under
the contracts and current market prices for tantalum. For the same reasons, we
also determined to further write down our raw material inventories of tantalum
ore, powder and wire. These charges amounted to approximately $106,000,000 for
the purchase commitments and $25,700,000 for inventory. In 2002, we also
recorded a write-down of $1,700,000 on palladium inventories.

We anticipate, based on current and foreseeable demand for tantalum
capacitors, that our minimum purchase commitments under the contracts with Cabot
will substantially exceed our requirements over the terms of the contracts. See
"Contractual Commitments" below. Also, we do not anticipate utilizing our
stockpile of tantalum ore at any time in the foreseeable future. Tantalum ore,
powder and wire have an indefinite shelf life; therefore, we believe that we
will eventually utilize all of the material in our inventory or purchased under
the contracts. Our visibility of future demand is limited, however, and actual
consumption may differ substantially from the amounts that we now estimate.

Foreign Currency

In 2002, we realized approximately 69% of our revenues from customers
outside the United States. Any third party sales not using the U.S. dollar as
the functional currency must be reported in the local currency and be translated
at the weighted average exchange rate. This translation will have an impact on
the net sales line of the income statement and also on the expense lines of the
income statement. We generally do not purchase foreign currency exchange
contracts or other derivative instruments to hedge our exposure to foreign
currency fluctuations.



24


Critical Accounting Policies

Our significant accounting policies are summarized in Note 1 to our
Consolidated Financial Statements. We identify here a number of policies that
entail significant judgments or estimates.

Revenue recognition

We record revenues at the time that we ship products to our customers.
Many of our shipments are to distributors, who purchase for resale to end-users.
The distributors have certain limited rights to return products. They are also
entitled to certain price protection benefits, which give them credit for unsold
products that they continue to hold in inventory when we reduce our book prices
for these items. At the time we record sales to these distributors, we also
recognize allowances against net sales for estimated product returns and price
protection. To estimate these allowances, we review historical returns and price
adjustments on both a consolidated level and on an individual distributor level
as well as the general business and economic climate. These procedures require
the exercise of significant judgments, but we believe they enable us to estimate
reasonably future credits for returns and price adjustments.

Accounts Receivable

Our receivables represent a significant portion of our current assets.
We are required to estimate the collectability of our receivables and to
establish allowances for the amount of receivables that will prove
uncollectible. We base these allowances on our historical collection experience,
the length of time our receivables are outstanding, the financial circumstances
of individual customers, and general business and economic conditions.

Inventories

We value our inventories at the lower of cost or market, with cost
determined under the first-in first-out method and market based upon net
realizable value. The valuation of our inventories requires our management to
make market estimates. For instance, in the case of tantalum powder, we estimate
market value by obtaining current quotations from available sources of supply.
For work in progress goods, we are required to estimate the cost to completion
of the products and the prices at which we will be able to sell the products.
For finished goods, we must assess the prices at which we believe the inventory
can be sold. As noted, we recorded substantial write-downs of our tantalum and
palladium inventories in 2002.

Estimates of Restructuring Expense and Purchase Related Restructuring
Costs

In 2002, we recorded restructuring costs of approximately $48,000,000
related to our acquisitions and $30,970,000 related to our existing businesses.
Our acquisition-related restructuring costs included, among other things, costs
related to our acquisition of BCcomponents in December 2002. Our restructuring
activities related to our existing business were designed to reduce both our
fixed and variable costs, particularly in response to the reduced demand for our
products occasioned by the continuing electronics industry downturn in 2002.
These included the disposition of fixed assets and the termination of employees.
Acquisition-related costs are included in the allocation of the cost of the
acquired business and generally add to goodwill. Other restructuring costs are
expensed during the period in which we determine that we will incur those costs,
and all of the requirements for accrual are met.

Because these costs are recorded based upon estimates, our actual
expenditures for the restructuring activities may differ from the initially
recorded costs. If this happens, we will have to adjust our estimates in future
periods. In the case of acquisition-related restructuring costs, this would
generally require a change in value of the goodwill appearing on our balance
sheet, but would not affect our earnings. In the case of other restructuring
costs, we could be required either to record additional expenses in future
periods, if our initial estimates were too low, or to reverse part of the
charges that we recorded initially, if our initial estimates were too high.

Raw Material Write-downs

25


As indicated, in the fourth quarter of 2002 we took charges of
approximately $106,000,000 against contractual commitments to purchase tantalum
powder and wire through 2006 and wrote-off approximately $25,700,000 of our
existing inventory of tantalum ore, powder and wire. We did this because the
current market prices of tantalum are substantially below the prices at which we
are committed to purchase tantalum in the future under long-term contracts and
the prices at which we were carrying our tantalum raw materials inventory. These
actions involved significant judgments on our part, including decisions of
whether to take these charges and write-downs, their timing and their amount.

We made the decision to take the charges and write-downs after our
management concluded that the substantial fall-off in the demand for tantalum
capacitors was likely to continue for the foreseeable future. Combining this
assessment with the worldwide over-capacity in tantalum production, we could not
foresee when tantalum prices might recover from their currently depressed
levels. We made this determination in the fourth quarter of 2002 after it was
apparent that the inventory levels of our customers had dropped without any
effect on the demand or pricing for tantalum capacitors and after the settlement
of our competitor's tantalum pricing litigation, described above. Although we
believe that both the charges and write-downs as well as their timing were
appropriate under the circumstances, our visibility for future demand and
pricing is limited and the judgments made by our management necessarily involved
subjective assessments.

The write-down of our current tantalum inventory and the charges with
respect to our future tantalum commitments were calculated based on current
market prices for tantalum. There is no established market on which tantalum raw
materials are regularly traded and quoted. We based our determination of current
market price on quotations from two suppliers of these materials. We cannot say
that the prices at which we could currently enter into contracts for the
purchase of tantalum would be the same as these quoted prices. Also, in
quantifying the charges that we took against our future purchase commitments, we
assumed for lack of any other benchmark that current market prices would
continue through 2006, when our purchase commitments end. Had we made other
assumptions on current and future prices for tantalum, the amount of the
inventory write-downs and the charges against our purchase commitments would
have been different.

If tantalum prices were to recover in the future, we would not reverse
the write-downs that we have taken on our raw materials inventory or the charges
that we have recorded against our purchase commitments, so that our cost of
materials will continue to reflect these write-downs and charges regardless of
future price increases in tantalum. This could have the effect of increasing the
earnings that we realize in future periods from what they would have been had we
not taken these actions until future raw material prices were known with
certainty. We could also be required to take further write-downs and charges if
tantalum prices experience further declines.

Goodwill

Goodwill represents the excess of the cost of businesses acquired over
the fair value of the related net assets at the date of acquisition. In
accordance with Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets, we no longer amortize goodwill, but test for
impairment of goodwill using a market multiple approach.

Long-Lived Assets

We assess the impairment of our long-lived assets, other than goodwill
and trademarks, including property, plant and equipment, and identifiable
intangible assets subject to amortization whenever events or changes in
circumstances indicate the carrying value may not be recoverable. Factors we
consider important which could trigger an impairment review include significant
changes in the manner of our use of the acquired asset, changes in historical or
projected operating performance and significant negative economic trends.

Results of Operations

Income statement captions as a percentage of sales and the effective
tax rates were as follows:


26




Year Ended December 31
------------------------------------------------
2002 2001 2000
---- ---- ----


Costs of products sold 79.8% 77.0% 59.2%
Gross profit 20.2 23.0 40.8
Selling, general and
administrative expenses 17.1 16.8 12.1
Operating (loss) income (4.4) 0.9 28.3
(Loss) earnings before income
taxes (benefit) and minority
interest (5.5) 0.6 28.0
Net (loss) earnings (5.1) 0.0 21.0

Effective tax rate (16.9) 56.4 21.5



Net Sales, Gross Profits and Margins

Sales for the year ended December 31, 2002 increased by $167,467,000 or
10.1% over the prior year. This combines a substantial increase in sales in the
active segment, attributable in large measure to 2001 acquisitions reflected
only partially in 2001 but fully in 2002, and a continuing drop in sales in the
passive segment in 2002. The weakening of the U.S. dollar against
foreign currencies for the year ended December 31, 2002, in comparison to the
prior year, resulted in increases in reported sales of $18,000,000.

Costs of products sold as a percentage of net sales were 79.8% for the
year ended December 31, 2002 as compared to 77.0% for the prior year. Gross
profit, as a percentage of net sales, for the year ended December 31, 2002 was
20.2% as compared to 23.0% for the prior year. The erosion in overall profit
margins reflects the continuing weakness in the passive segment, offset in
substantial part by improvements in the active segment. Both volume reduction
and further declines in average selling prices contributed to the declining
profit margins in the passive segment. Profit margins in the active segment
benefited from higher volumes, even as average selling prices continued to
decline in various product lines. For the year ended December 31, 2002, costs of
products sold included $27,400,000 for the write-down of tantalum and palladium
inventories as compared to $70,000,000 for the write-down of tantalum and
palladium inventories in 2001.

Sales for the year ended December 31, 2001 decreased $809,720,000 or
32.9% from the prior year, reflecting the downturn in the electronics industry
that we experienced in 2001. The strengthening of the U.S. dollar against
foreign currencies for the year ended December 31, 2001, in comparison to the
prior year, resulted in decreases in reported sales of $16,338,000. We
experienced lower sales in both our active and passive components businesses.
The decline was particularly pronounced in our commodity business for passive
components such as capacitors and resistors. The decline in the year-to-year
sales numbers reflects both lower unit sales volume and substantial downward
pricing pressure. The decline was evidenced in virtually all of our end markets,
but was particularly pronounced in wireless communications and computers.

Costs of products sold as a percentage of net sales were 77.0% for the
year ended December 31, 2001 as compared to 59.2% for the prior year. Gross
profit, as a percentage of net sales, for the year ended December 31, 2001 was
23.0% as compared to 40.8% for the prior year. The erosion in profit margins, in
both the active and passive segments, reflected reduced volume and lower prices
in 2001, offset, to some extent, by a reduction in fixed costs during the year.
For the year ended December 31, 2001, costs of products sold included
$70,000,000 for the write-down of tantalum and palladium inventories.

See "Israeli Government Incentives" regarding Israeli government
grants, which are recorded as a reduction in costs of products sold.

The following tables show sales and gross profit margins separately for
our passive and active segments.


27



Passive Components



Year Ended December 31
-----------------------------------------------------------
2002 2001 2000
---- ---- ----


Net Sales $ 767,246,000 $ 1,010,634,000 $ 1,627,860,000
Gross Profit Margin 8.9% 20.6% 41.7%



Net sales of passive components for the year ended December 31, 2002
decreased by $243,388,000 or 24.1% from comparable sales of the prior year. The
decrease in net sales was attributable to a combination of lower volume and a
continuing slide in prices. While our resistor and inductor business has
stabilized and even showed signs of improvement in the second half of the year
over the prior year's depressed results, the capacitor business continues to be
extremely problematic. This business is suffering from the poor environment for
electronics generally, and worldwide overcapacity for capacitor production and
supply in particular. However, with a slowing of the erosion in average selling
prices for capacitors in the fourth quarter of 2002, it is possible that the
capacitor business may also be stabilizing, albeit at a low level. Additionally,
write-downs of $27,400,000 on tantalum and palladium inventories were taken
during the year ended December 31, 2002, negatively impacting gross profit.
Gross profit margin for the segment in 2002 combined a positive profit margin of
19% for resistors and inductors and a negative 6% for capacitors.

The passive segment includes our Measurements Group, which experienced
significant acquisition activity in 2002. See "Overview-Segments" above.
Excluding these acquisitions, sales in the passive segment decreased by
$288,939,000 or 29% from the prior year. The acquisition of BCcomponents, a
worldwide manufacturer of resistors and capacitors, in December 2002 had no
effect on the 2002 results for the passive segment.

Net sales of passive components for the year ended December 31, 2001
decreased by $617,227,000 or 37.9% from comparable sales of the prior year. The
decrease in net sales was primarily due to low volume and strong pricing
pressure with respect to commodity products and, in particular, for tantalum
molded capacitor products. The decrease in the passive components business gross
profit margins in 2001 was related to strong pricing pressure, particularly with
respect to commodity products, excess capacity and higher costs for palladium
and tantalum powder. Additionally, write-downs of $70,000,000 on tantalum and
palladium inventories were taken during the year ended December 31, 2001,
negatively impacting gross profit.

Active Components



Year Ended December 31
-------------------------------------------------------
2002 2001 2000
---- ---- ----


Net Sales $1,055,567,000 $644,712,000 $837,206,000
Gross Profit Margin 28.4% 26.9% 39.0%


Net sales of the active components business for the year ended December
31, 2002 increased by $410,855,000 or 63.7% from comparable sales of the prior
year. The increase was in substantial measure due to the acquisitions of General
Semiconductor and the Infineon infrared business in 2001, which were included in
our results for all of 2002 but for only portions of 2001. However, it also
reflects sales recovery at our existing semiconductor operations. The increased
volume that we experienced in 2002 was offset to some extent by modest declines
in average selling prices in various product lines. The improvement in gross
profit margins to 28.4% from 26.9% is attributable primarily to improvements at
our 80.4% owned Siliconix subsidiary and to a lesser extent at our other
semiconductor operations. Siliconix's net sales for 2002 were $372,944,000 as
compared to $305,566,000 in 2001, a 22.1% increase, and its gross profit margins
rose from 24.6% for the year ended December 31, 2001 to 30.9% for the year ended
December 31, 2002.

Revenues in the active segment for 2002 included revenues of
$350,885,000 from the Infineon infrared business and General Semiconductor,
compared to revenues of $82,655,000 from these businesses in 2001. Excluding the
contribution of these acquisitions, net sales in 2002 would have increased by
25.4% as compared to 2001 and gross profit margin would have been 29.5%.


28


Net sales of the active components business for the year ended December
31, 2001 decreased by $192,494,000 or 23% from comparable sales of the prior
year. The decrease in the active components business net sales was primarily due
to the decrease in net sales of Siliconix. Siliconix's net sales for the year
ended December 31, 2001 were $305,566,000 as compared to $473,145,000, a 35.4%
decrease. The decrease from the prior year was primarily due to the downturn in
the computer and cell phone handset markets, which resulted in reduced demand
for our products, and overly optimistic industry forecasts for the cell phone
handset market, which led to excess handset inventories.

Revenues in the active segment for 2001 reflect revenues of $82,655,000
from the Infineon infrared business acquired in July 2001 and General
Semiconductor acquired in November 2001. Excluding the contribution of these
acquisitions, net sales in 2001 would have decreased by 32.9% as compared to
2000 and gross profit margin would have been 26.9%.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses for the year ended
December 31, 2002 were 17.1% of net sales as compared to 16.8% of net sales for
the prior year. The amount of these expenses increased by $33,080,000 for the
year ended December 31, 2002 as compared to the prior year. The higher
percentage and amount in 2002 was due primarily to acquisition activity. We
continue to implement cost reduction initiatives company-wide, with particular
emphasis on reducing headcount in high labor cost countries.

Selling, general, and administrative expenses for the year ended
December 31, 2001 were 16.8% of net sales as compared to 12.1% of net sales for
the prior year. The higher percentage in 2001 was due to reduced sales levels.
Selling, general and administrative expenses decreased by $19,144,000 for the
year ended December 31, 2001 as compared to the prior year.

Restructuring Expense

Our restructuring activities have been designed to cut both fixed and
variable costs, particularly in response to the reduced demand for products
occasioned by the electronics industry downturn beginning in 2001. These
activities included the closing of facilities and the termination of employees.
Restructuring costs are expensed during the period in which we determine that we
will incur those costs and all applicable requirements of accrual accounting for
recognizing such expenses are satisfied. Because costs are recorded based upon
estimates, actual expenditures for the restructuring activities may differ from
the initially recorded costs. If the initial estimates were too low or too high,
we could be required either to record additional expenses in future periods or
to reverse previously recorded expenses. We anticipate that we will realize the
benefits of the restructuring through lower labor costs and other operating
expenses in future periods, although it is not possible to quantify the expected
savings.

We recorded restructuring expense for the year ended December 31, 2002
of $30,970,000. These expenses are comprised of termination costs for 1,438
employees in Europe, Israel and the United States. Through the end of 2002, we
paid $18,440,000 of these costs, corresponding to the termination of 783
employees. The balance remaining at December 31, 2002 is expected to be paid out
by the end of 2003. We recorded $61,908,000 in restructuring expense in 2001,
including costs for both employee termination and facility closure. The
remaining balance at December 31, 2002 of $1,564,000 is expected to be paid out
by the end of 2003. For additional detail on restructuring expense in 2001 and
2002, see Note 4 to our Consolidated Financial Statements.

Restructuring expense is separate from plant closure, employee
termination and similar integration costs we incur in connection with our
acquisition activities. These amounts are included in the costs of our
acquisitions and do not affect earnings or losses on our statement of
operations. For a discussion of these costs in 2001 and 2002, see Note 2 to our
Consolidated Financial Statements.


29


Interest Expense

Interest expense for the year ended December 31, 2002 increased by
$11,913,000 compared to the prior year. This increase was a result of higher
average outstanding bank borrowings attributable to our acquisition activity,
offset in part by somewhat lower interest rates.

Interest expense for the year ended December 31, 2001 decreased by
$8,329,000 compared to the prior year. This decrease was a result of lower
average outstanding bank borrowings and lower interest rates on borrowings in
2001 as compared to the prior year. During the second quarter of 2001, we paid
down the debt then outstanding under our revolving credit agreement with the
proceeds received from the issuance of Liquid Yield Option Notes (LYONs). We
also added $172,500,000 principal amount of 5.75% Convertible Subordinated
Debentures and $85,000,000 of bank debt in November 2001 from the acquisition of
General Semiconductor.

Other Income

Other income for the year ended December 31, 2002 was $8,664,000 as
compared to $12,701,000 for the comparable prior year period. Other income for
the year ended December 31, 2001 was $12,701,000 as compared to $18,904,000 for
the comparable prior year period. Other income in both 2002 and 2001 consisted
primarily of interest income, as well as gains on disposal of property and
equipment, and foreign exchange gains. For additional information, see Note 8 to
our Consolidated Financial Statements.

Minority Interest

Minority interest increased by $5,574,000 for the year ended December
31, 2002 as compared to the prior year, primarily due to the increase in net
earnings of Siliconix, of which we own 80.4%. Minority interest decreased by
$20,280,000 for the year ended December 31, 2001 as compared to the prior year,
primarily due to the decrease in net earnings of Siliconix.

Income Taxes

The effective tax rate for the year ended December 31, 2002 was 16.9%,
reflecting an income tax benefit, compared to 56.4% for the prior year,
reflecting income tax expense. The low effective rate in 2002 is primarily a
consequence of the losses before income taxes in low tax jurisdictions. While we
continue to benefit from low tax rates in Israel, we recognized a large taxable
loss in Israel in 2002, with the effect of reducing our overall tax benefit on
our losses. The more favorable Israeli tax rates are applied to specific
approved projects and are normally available for a period of ten or fifteen
years (see the discussion of our Israeli tax benefits in "Overview-Israeli
Government Incentives" above). Comparatively, in 2001, the high effective tax
rate was due to low net earnings and the non-tax deductibility of purchased
research and development expense related to the General Semiconductor
acquisition.

The effective tax rate for the year ended December 31, 2001 was 56.4%
as compared to 21.5% for the prior year. The increase in the tax rate for 2001
reflected a significant decrease in net earnings, as compared to 2000, in low
tax jurisdictions, and the non-tax deductibility of the purchased research and
development expense ($16,000,000) related to the acquisition of General
Semiconductor. The low tax rates in Israel applicable to us, as compared to the
statutory rate in the United States, resulted in increases in net earnings of
$3,009,000 and $89,745,000 for the years ended December 31, 2001 and 2000,
respectively.

Financial Condition and Liquidity

Cash flows from operations were $366,871,000 for the year ended
December 31, 2002 compared to $161,418,000 for the prior year. The increase in
cash generated from operations reflects improved working capital management,
including reductions in inventory and accounts receivable. The inventory
reduction reflects production adjustments we implemented in response to the
business slowdown in order to control inventory levels. Net purchases of
property and equipment for the year ended December 31, 2002 were $110,074,000
compared to $162,493,000 in the prior year. The decrease reflects an effort to
rationalize our capital spending to the realities of

30


the current economic environment, while making prudent investments in our
capital infrastructure in order to remain competitive and efficient. We also
used $278,735,000 in cash for acquisitions in 2002, primarily for our
acquisitions of BCcomponents in December 2002 and other smaller acquisitions in
our Measurements Group during the year. The acquisitions were funded in part by
our cash balances and in part from borrowings. See Note 2 to our Consolidated
Financial Statements for discussion of these acquisitions.

We made net payments of $14,000,000 on our revolving credit lines
during 2002, funded from cash flow from operations. See Notes 2 and 4 to our
Consolidated Financial Statements for discussion of acquisition related
restructuring costs paid during 2002 and expected to be paid in the future.
Other accrued expenses include $95,470,000 of acquisition-related costs and
other restructuring costs expected to be paid in cash subsequent to 2002.

In May 2001, we completed the offering of $550 million aggregate
principal amount at maturity of Liquid Yield Option Notes (LYONs) at an offering
price of $551.26 per $1,000 aggregate principal amount at maturity of notes. The
net proceeds to us of this offering were approximately $294.1 million. The LYONs
are convertible into approximately 9.7 million shares of our common stock. The
LYONs may be put to us at their accreted value on June 4 of each of 2004, 2006,
2011 and 2016 at a purchase price per $1,000 aggregate principal amount at
maturity of $602.77, $639.76, $742.47 and $816.67, respectively. See Note 6 to
our Consolidated Financial Statements for discussion of the terms of the LYONs.

We completed our acquisition of General Semiconductor on November 2,
2001 in a stock-for-stock transaction resulting in the issuance of 21,305,127
shares of our common stock. General Semiconductor had outstanding $172.5 million
principal amount 5.75% convertible notes, which as a result of the acquisition
are now convertible into approximately 6.3 million shares of our common stock.
As required by the terms of the notes, following the merger, General
Semiconductor made an offer to repurchase the notes at 101% of their principal
amount plus accrued interest. As a result of this offer, we acquired notes with
a principal amount of $1.5 million in January 2002.

In connection with our acquisition of BCcomponents in December 2002, we
issued $105,000,000 principal amount of our floating rate unsecured loan notes
due 2102. The notes bear interest at LIBOR plus 1.5% through December 31, 2006
and at LIBOR thereafter. The interest payable on the notes could be further
reduced to 50% of LIBOR after December 31, 2010 if the price of our common stock
trades above a specified target price, as provided in the notes. The notes are
subject to a put and call agreement under which the holders may at any time put
the notes to us in exchange for 6,176,471 shares of our common stock in the
aggregate, and we may call the notes in exchange for cash or for shares of our
common stock after 15 years from the date of issuance.

Also in December 2002, we amended our long-term revolving credit and
swing line facility to, among other things, reduce the aggregate bank
commitments under this facility from $660,000,000 to $500,000,000. This amount
may be increased in the future under certain circumstances. As of December 31,
2002, we had $111,000,000 outstanding under this facility. Letters of credit
totaling $30,633,000 were outstanding at December 31, 2002. Borrowings under
the facility bear interest at variable rates based, at our option, on the prime
rate or a eurocurrency rate, and in the case of any swing line advance, the
quoted rate. The borrowings are secured by pledges of stock in certain of our
significant subsidiaries and indirect subsidiaries and guaranteed by certain of
our significant subsidiaries. We are required to pay facility fees on the
long-term facility. The credit facility restricts us from paying cash dividends,
and requires us to comply with certain financial covenants. The facility expires
on June 1, 2005, although we may request year-to-year renewals. See Note 6 to
our Consolidated Financial Statements for additional information.

At December 31, 2002, we had a current ratio (current assets to current
liabilities) of 2.6 to 1, compared with a ratio of 3.3 to 1 at December 31,
2001. The decrease in 2002 is attributable to cash spent on acquisitions, lower
inventories resulting from our inventory management efforts and lower accounts
receivable. Our ratio of long-term debt, less current portion, to stockholders'
equity was 0.30 to 1 at December 31, 2002 compared to 0.26 to 1 at December 31,
2001. The increase in long-term debt ratio reflects the issuance of the floating
rate notes in connection with the BCcomponents acquisition and the net loss for
2002.

31


Contractual Commitments

As of December 31, 2002 the Company had contractual obligations in the
form of non-cancelable operating leases (see Note 13 to our Consolidated
Financial Statements) and long-term contracts for the purchase of tantalum
powder and wire (see Note 15 to our Consolidated Financial Statements), as
follows:




(in thousands)
Payments Due by Period
----------------------
After
Less than 1-3 4-5 5
Total 1 year years years years
----- --------- ----- ----- -----


Operating Leases $ 76,974 $ 21,978 $ 28,094 $ 22,163 $ 4,739
Tantalum purchases 380,800 100,300 220,400 60,100 --
-------- -------- -------- -------- --------

Total $457,774 $122,278 $248,494 $ 82,263 $ 4,739
======== ======== ======== ======== ========


Inflation

Normally, inflation does not have a significant impact on our
operations as our products are not generally sold on long-term contracts.
Consequently, we can adjust our selling prices, to the extent permitted by
competition, to reflect cost increases caused by inflation.

Safe Harbor Statement

From time to time, information provided by us, including but not
limited to statements in this report, or other statements made by or on our
behalf, may contain "forward-looking" information within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve a
number of risks, uncertainties and contingencies, many of which are beyond our
control, which may cause actual results, performance or achievements to differ
materially from those anticipated. Set forth below are important factors that
could cause our results, performance or achievements to differ materially from
those in any forward-looking statements made by us or on our behalf.

Economic Environment, Competition, Backlog
------------------------------------------

o We and others in the electronic and semiconductor component
industry have for the past several years experienced a
decline in product demand on a global basis, resulting in
order cancellations and deferrals. This decline is primarily
attributable to a slowing of growth in the personal computer
and cellular telephone product markets. This slowdown may
continue and may become more pronounced. The current
slowdown in demand, as well as recessionary trends in the
global economy, makes it more difficult for us to predict
our future sales, which also makes it more difficult to
manage our operations, and could adversely impact our
results of operations.

o Our business is highly competitive worldwide, with low
transportation costs and few import barriers. We compete
principally on the basis of product quality and reliability,
availability, customer service, technological innovation,
timely delivery and price. The electronic components
industry has become increasingly concentrated and globalized
in recent years and our major competitors, some of which are
larger than us, have significant financial resources and
technological capabilities.

o Many of the orders that comprise our backlog may be canceled
by customers without penalty. Customers may on occasion
double and triple order components from multiple sources to
ensure timely delivery when backlog is particularly long.
Customers often cancel orders when

32


business is weak and inventories are excessive, a phenomenon
that we are experiencing in the current economic slowdown.
Therefore, we cannot be certain the amount of our backlog
does not exceed the level of orders that will ultimately be
delivered. Our results of operations could be adversely
impacted if customers cancel a material portion of orders in
our backlog.

Product Development, Business Expansion, Military Qualifications
----------------------------------------------------------------

o Our future operating results are dependent, in part, on our
ability to develop, produce and market new and innovative
products, to convert existing products to surface mount
devices and to customize certain products to meet customer
requirements. There are numerous risks inherent in this
complex process, including the risks that we will be unable
to anticipate the direction of technological change or that
we will be unable to timely develop and bring to market new
products and applications to meet customers' changing needs.

o Our long-term historical growth in revenues and net earnings
has resulted, in large part, from our strategy of expansion
through acquisitions. However, we cannot assure you that we
will identify or successfully complete transactions with
suitable acquisition candidates in the future. We also
cannot assure you that acquisitions we complete will be
successful. If an acquired business fails to operate as
anticipated or cannot be successfully integrated with our
other businesses, our results of operations, enterprise
value, market value and prospects could all be materially
and adversely affected.

o If we were to undertake a substantial acquisition for cash,
the acquisition would likely need to be financed in part
through bank borrowings or the issuance of public or private
debt. This would likely decrease our ratio of earnings to
fixed charges and adversely affect other leverage criteria.
Under our existing credit facility, we are required to
obtain our lenders' consent for certain additional debt
financing, to comply with other covenants including the
application of specific financial ratios, and are restricted
from paying cash dividends on our capital stock. We cannot
assure you that the necessary acquisition financing would be
available to us on acceptable terms when required. If we
were to undertake an acquisition for equity, the acquisition
may have a dilutive effect on the interests of the holders
of our common stock.

o Any drop in demand or increase in supply of our products due
to the overcapacity of our competitors could cause a
dramatic drop in average sales prices causing a decrease in
gross margins.

o We have qualified certain of our products under various
military specifications. Products from some of our United
States manufacturing facilities experience a reduction in
product classification levels from time to time. During the
time that the classification level is reduced for a product
with military application, net sales and earnings
attributable to that product may be adversely affected.

Foreign Operations and Sales
----------------------------

o We have operations in 17 countries around the world outside
the United States, and approximately 69% of our revenues
during 2002 were derived from sales to customers outside the
United States. Some of the countries in which we operate
have in the past experienced and may continue to experience
political, economic and military instability or unrest.
These conditions could have an adverse impact on our ability
to operate in these regions and, depending on the extent and
severity of these conditions, could materially and adversely
affect our overall financial condition and operating
results. In particular, current tensions in the Middle East
could adversely affect our business operations in Israel and
elsewhere.

33


o We have increased our operations in Israel over the past
several years. The low tax rates in Israel applicable to
earnings of our operations in that country compared to the
rates in the United States, have historically had the effect
of increasing our net earnings, although that was not the
effect in 2002. In addition, we have taken advantage of
certain incentive programs in Israel, which take the form of
grants designed to increase employment in Israel. Any
significant increase in the Israeli tax rates or reduction
or elimination of the Israeli grant programs that have
benefited us could have an adverse impact on our results of
operations. See Note 1 to our Consolidated Financial
Statements for a description of our accounting policy for
grants received by certain subsidiaries from governments
outside the United States.

Restructuring and Cost Reduction Activities
-------------------------------------------

o Our strategy is aimed at achieving significant production
cost savings through the transfer and expansion of
manufacturing operations to and in countries with lower
production costs, including the Czech Republic, Hungary,
India, Israel, Malaysia, Mexico, the People's Republic of
China, the Philippines, Portugal and the Republic of China
(Taiwan). In this process, we may experience
under-utilization of certain plants and factories in high
labor cost regions and capacity constraints in plants and
factories located in lower labor cost regions. This may
result, initially, in production inefficiencies and higher
costs. These costs include those associated with
compensation in connection with work force reductions and
plant closings in the higher labor cost regions, start-up
expenses, manufacturing and construction delays, and
increased depreciation costs in connection with the
initiation or expansion of production in lower labor cost
regions.

o As we implement transfers of certain of our operations, we
may experience strikes or other types of labor unrest as a
result of lay-offs or termination of employees in higher
labor cost countries.

o Our strategy also focuses on the reduction of selling,
general and administrative expenses through the integration
or elimination of redundant sales offices and administrative
functions at acquired companies. Our inability to achieve
these goals could have an adverse effect on our results of
operations.

Raw Materials
-------------

o Our results of operations may be adversely impacted by:

1. difficulties in obtaining raw materials,
supplies, power, natural resources and any
other items needed for the production of our
products;

2. the effects of quality deviations in raw
materials, particularly tantalum powder,
palladium and ceramic dielectric materials;
and

3. the effects of significant fluctuations in
the prices for tantalum or palladium on
existing inventories and purchase
commitments for these materials. See
"Description of the Business - Sources of
Supplies" above.

Environmental Issues
--------------------

o Our manufacturing operations, products and/or product
packaging are subject to environmental laws and regulations
governing air emissions, wastewater discharges, the
handling, disposal and remediation of hazardous substances,
wastes and certain chemicals used or generated in our
manufacturing processes, employee health and safety labeling
or other notifications with respect to the content or other
aspects of our processes, products or packaging,
restrictions on the use of certain materials in or on design
aspects of our products


34


or product packaging and responsibility for disposal of
products or product packaging. More stringent environmental
regulations may be enacted in the future, and we cannot
presently determine the modifications, if any, in our
operations that any such future regulations might require,
or the cost of compliance with these regulations. In order
to resolve liabilities at various sites, we have entered
into various administrative orders and consent decrees, some
of which may be, under certain conditions, reopened or
subject to renegotiation.

The Class B Common Stock
------------------------

o We have two classes of common stock: common stock and Class
B common stock. The holders of common stock are entitled to
one vote for each share held, while the holders of Class B
common stock are entitled to 10 votes for each share held.
Currently, Dr. Zandman, our Chairman and CEO, owns or has
voting power over substantially all of our Class B common
stock and accordingly controls approximately 49.1% of our
outstanding voting power. As a result, Dr. Zandman is able
to effectively control stockholder action.

o Effective control of our company by holders of the Class B
common stock may make us less attractive as a target for a
takeover proposal. It may also make it more difficult or
discourage a merger proposal or proxy contest for the
removal of the incumbent directors. Accordingly, this may
deprive the holders of common stock of an opportunity they
might otherwise have to sell their shares at a premium over
the prevailing market price in connection with a merger or
acquisition of the Company with or by another company.



35


New Accounting Standards

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. In addition to other technical provisions, this Statement rescinds
SFAS No. 4, which required all gains and losses from extinguishment of debt to
be aggregated and, if material, classified as an extraordinary item, net of tax.
The provisions of SFAS 145 were adopted by the Company on January 1, 2003.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. This statement nullifies EITF Issue
No. 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). SFAS 146 requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is incurred rather
than at the date of an entity's commitment to an exit plan. The provisions of
SFAS 146 will be adopted by the Company for exit or disposal activities
initiated after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure. SFAS 148 amends SFAS No.
123, Accounting for Stock-Based Compensation, to provide alternative methods of
transition to SFAS 123's fair value method of accounting for stock-based
employee compensation. The Company is evaluating the potential impact of
adopting the fair value method of accounting for its stock-based employee
compensation.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Disclosure

Our cash flows and earnings are subject to fluctuations resulting from
changes in foreign currency exchange rates and interest rates. We manage our
exposure to these market risks through internally established policies and
procedures and, when deemed appropriate, through the use of derivative financial
instruments. Our policies do not allow speculation in derivative instruments for
profit or execution of derivative instrument contracts for which there are no
underlying exposures. We do not use financial instruments for trading purposes
and we are not a party to any leveraged derivatives. We monitor our underlying
market risk exposures on an ongoing basis and believe that we can modify or
adapt our hedging strategies as needed.

We are exposed to changes in U.S. dollar LIBOR interest rates on our
floating rate revolving credit facility. At December 31, 2002, the outstanding
balance under this facility was $111,000,000. On a selective basis, we from time
to time enter into interest rate swap or cap agreements to reduce the potential
negative impact increases in interest rates could have on our outstanding
variable rate debt. The impact of interest rate instruments on our results of
operations in each of the three years ended December 31, 2002, 2001 and 2000 was
not significant. See Notes 6 and 14 to our Consolidated Financial Statements for
components of our long-term debt and interest rate swap arrangements.

In August 1998, we entered into six interest rate swap agreements with
a total notional amount of $300,000,000 to manage interest rate risk related to
our multicurrency revolving line of credit. As of December 31, 2002, five of
these six agreements had been terminated. The remaining agreement, which expires
in August 2003, has a notional amount of $100,000,000 and requires us to make
payments to the counterparty at variable rates based on USD-LIBOR-BBA rates. At
December 2002, 2001, and 2000, we paid a weighted average fixed rate of 5.77%
and received a weighted average variable rate of 1.40%, 1.93%, and 6.66%,
respectively. The fair value of our interest rate swap agreements, based on
current market rates, approximated a net payable of $3,309,000 at December 31,
2002 and a net payable of $4,686,000 at December 31, 2001. During the year ended
December 31, 2001, the Company recorded a pre tax loss of $3,668,000 relating to
an ineffective hedge for a portion of time relating to an interest rate swap
agreement (see Note 8 to our Consolidated Financial Statements).


36


Foreign Exchange Risk

We are exposed to foreign currency exchange rate risks. Our significant
foreign subsidiaries are located in Germany, France, Israel and Asia. In most
locations, we have introduced a "netting" policy where subsidiaries pay all
intercompany balances within thirty days. As of December 31, 2002, we did not
have any outstanding foreign currency forward exchange contracts.

In the normal course of business, our financial position is routinely
subjected to a variety of risks, including market risks associated with interest
rate movements, currency rate movements on non-U.S. dollar denominated assets
and liabilities and collectability of accounts receivable.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following Consolidated Financial Statements of the Company and our
subsidiaries, together with the report of independent auditors thereon, are
presented under Item 15 of this report:

Report of Independent Auditors.

Consolidated Balance Sheets -- December 31, 2002 and 2001.

Consolidated Statements of Operations -- for the years ended
December 31, 2002, 2001 and 2000.

Consolidated Statements of Cash Flows -- for the years ended
December 31, 2002, 2001 and 2000.

Consolidated Statements of Stockholders' Equity -- for the years
ended December 31, 2002, 2001 and 2000.

Notes to Consolidated Financial Statements -- December 31, 2002.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.



37


PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required under this Item with respect to Directors is
contained in our definitive proxy statement, which will be filed within 120 days
of December 31, 2002, our most recent fiscal year, and is incorporated herein by
reference.

Information required under this Item with respect to our Executive
Officers is set forth in Part I, Item 4A hereof under the caption, "Executive
Officers of the Registrant."

Item 11. EXECUTIVE COMPENSATION

Information required under this Item is contained in our definitive
proxy statement, which will be filed within 120 days of December 31, 2002, our
most recent fiscal year, and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Information required under this Item concerning security ownership of
certain beneficial owners and management is contained in our definitive proxy
statement, which will be filed within 120 days of December 31, 2002, our most
recent fiscal year, and is incorporated herein by reference.

Equity Compensation Plan Information

The following table sets forth certain equity compensation plan information with
respect to both equity compensation plans approved by security holders and
equity compensation plans not approved by security holders.




Number of Number of securities
securities to be Weighted-average remaining available
issued upon exercise price for future issuance
exercise of of outstanding under equity
outstanding options, compensation plans
options, warrants warrants and (excluding securities
Plan category and rights rights reflected in column (a)
- ------------- (a) (b) (c)

Equity compensation plans approved by
security holders:


1997 Stock Option Program(1) 2,159,000 $ 12.51 --
1998 Stock Option Program(1) 3,027,000 $ 15.62 1,036,000
General Semiconductor Stock Plan(2) 4,045,000 $ 18.31 --
--------- --------- ---------
Subtotal 9,231,000 $ 16.07 1,036,000

Equity compensation plans not approved
by security holders:
None -- -- --
--------- --------- ---------
Subtotal 9,231,000 $ 16.07 1,036,000
--------- --------- ---------
Total 9,231,000 $ 16.07 1,036,000
========= ========= =========


- -----------------------
(1) See Note 12 to our Consolidated Financial Statements for further
description of these plans.
(2) The General Semiconductor Stock Plan was assumed in the Company's
acquisition of General Semiconductor Inc. on November 2, 2001. See Note 12
to our Consolidated Financial Statements for further description of this
plan.


38



Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required under this Item is contained in our definitive
proxy statement, which will be filed within 120 days of December 31, 2002, our
most recent fiscal year, and is incorporated herein by reference.

Item 14. DISCLOSURE CONTROLS AND PROCEDURES

An evaluation was performed as of a date within 90 days prior to the
filing date of this report, under the supervision and with the participation of
our management, including the CEO and CFO, of the effectiveness of the design
and operation of our disclosure controls and procedures. Based on that
evaluation, our management, including the CEO and CFO, concluded that our
disclosure controls and procedures are effective in ensuring that all material
information required to be filed in this report has been made known to them in a
timely fashion.

There have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date management completed their evaluation.



39



PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) (1) All Consolidated Financial Statements of the Company and its
subsidiaries for the year ended December 31, 2002 are filed
herewith. See Item 8 of this Report for a list of such financial
statements.

(2) All financial statement schedules for which provision is
made in the applicable accounting regulation of the
Securities and Exchange Commission are not required under
the related instructions or are inapplicable and therefore
have been omitted.

(3) Exhibits -- See response to paragraph (c) below.

(b) Report on Form 8-K, dated December 23, 2002, reporting Item 2
(Acquisition or Disposition of Assets), Item 5 (Other Events),
and Item 7 (Financial Statements and Exhibits). Financial
Statements of Business Acquired and Pro Forma Financial
Information were filed by amendment to the Form 8-K, dated
February 26, 2003.

(c) Exhibits:

2.1 Agreement and Plan of Merger, dated as of July 31, 2001, by and among
Vishay Intertechnology, Inc., Vishay Acquisition Corp., and General
Semiconductor, Inc. Incorporated by reference to Annex A to the Joint
Proxy Statement/Prospectus forming a part of the Registration
Statement on Form S-4 (No. 333-69004) filed on September 6, 2001.

2.2 Share Sale and Purchase Agreement between Phoenix Acquisition Company
S.ar.l; Other Investors (as defined); Mezzanine Lenders (as defined);
Vishay Intertechnology, Inc.; Vishay Europe Gmbh; and BCcomponents
International B.V., dated as of November 10, 2002. Incorporated by
reference to Exhibit 2.1 to Form 8-K File filed December 23, 2002.

2.3 Amendment to the Share Sale and Purchase Agreement between Phoenix
Acquisition Company S.ar.l; Other Investors (as defined); Mezzanine
Lenders (as defined); Vishay Intertechnology, Inc.; Vishay Europe
Gmbh; and BCcomponents International B.V., dated as of December 4,
2002. Incorporated by reference to Exhibit 2.2 to Form 8-K File filed
December 23, 2002.

3.1 Composite Amended and Restated Certificate of Incorporation of the
Company dated August 3, 1995. Incorporated by reference to Exhibit 3.1
to the Company's quarterly report on Form 10-Q for the quarter ended
June 30, 1995 (the "1995 Form 10-Q"). Certificate of Amendment of
Composite Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Exhibit 3.1 to Form 10-Q for the
quarter ended June 30, 1997 (the "1997 Form 10-Q"). Certificate of
Amendment of the Amended and Restated Certificate of Incorporation of
the Company. Incorporated by reference to Exhibit 3.1 to Form 8-K File
filed November 13, 2001.

3.2 Amended and Restated Bylaws of Registrant. Incorporated by reference
to Exhibit 3.1 to the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 2001.

4.1 Indenture dated as of June 4, 2001 between Vishay Intertechnology,
Inc. and Bank of New York as Trustee. Incorporated by reference to
Exhibit 4.1 to Current Report of Registrant on Form 8-K filed on June
18, 2001 under the Securities Exchange Act of 1934 except that clause
(x) of Section 5 thereof is corrected to read "(x) 0.0625% of the
average LYON Market Price for the Five Day Period with respect to such
Contingent Interest Period and".

40


4.2 Indenture dated as of December 14, 1999 between General Semiconductor,
Inc. and The Bank of New York as Trustee. Incorporated by reference to
Exhibit 4.5 to the Registration Statement on Form S-3 (No. 333-94513)
filed by General Semiconductor, Inc. on January 12, 2000.

4.3 First Supplemental Indenture dated as of November 2, 2001 among
General Semiconductor, Inc., Vishay Intertechnology, Inc., and The
Bank of New York as Trustee to Indenture dated as of December 14,
1999. Incorporated by reference to Exhibit 4.3 to the Company's annual
report on Form 10-K for the year ended December 31, 2001.

4.4 Second Supplemental Indenture dated as of January 8, 2002 among
General Semiconductor, Inc., Vishay Intertechnology, Inc., and The
Bank of New York as Trustee to Indenture dated as of December 14,
1999. Incorporated by reference to Exhibit 4.4 to the Company's annual
report on Form 10-K for the year ended December 31, 2001.

10.1 Performance-Based Compensation Plan for Chief Executive Officer of
Registrant. Incorporated by reference to Exhibit 10.1 to Form 10-K for
fiscal year ended December 31, 1993.

10.2 Vishay Intertechnology, Inc. Amended and Restated Long Term Revolving
Credit Agreement, dated as of June 1, 1999, by and among Vishay and
the Permitted Borrowers (as defined therein), the Lenders (as defined
therein), and Comerica Bank, as administrative agent. Incorporated by
reference to Exhibit 10.1 to the Company's Registration Statement on
Form S-3 (No. 333-52594) filed December 22, 2000.

10.3 First Amendment to Amended and Restated Vishay Intertechnology, Inc.
Long Term Revolving Credit Agreement and Other Loan Documents, dated
as of August 31, 2000, by and among the Company and the Permitted
Borrowers (as defined therein), Comerica Bank and the other Lenders
signatory thereto, and Comerica Bank, as administrative agent.
Incorporated by reference to Exhibit 10.2 to the Company's
Registration Statement on Form S-3 (No. 333-52594) filed December 22,
2000.

10.4 Second Amendment to Amended and Restated Vishay Intertechnology, Inc.
Long Term Revolving Credit Agreement and Consent, made as of December
13, 2002, by and among Vishay Intertechnology, Inc. the Permitted
Borrowers (as defined), Comerica Bank and the Lenders signatory
thereto and Comerica Bank as administrative agent. Incorporated by
reference to Exhibit 4.6 to Form 8-K filed on December 13, 2002.

10.5 Employment Agreement, dated as of March 15, 1985, between the Company
and Dr. Felix Zandman. Incorporated by reference to Exhibit 10.12 to
the Company's Registration Statement on Form S-2 (No. 33-13833).

10.6 Vishay Intertechnology, Inc. 1995 Stock Option Program. Incorporated
by reference to the Company's Definitive Proxy Statement on Schedule
14ADR filed April 7, 1995.

10.7 Vishay Intertechnology, Inc. 1997 Stock Option Program. Incorporated
by reference to the Company's Definitive Proxy Statement on Schedule
14A filed April 16, 1998.

10.8 Vishay Intertechnology, Inc. 1998 Stock Option Program. Incorporated
by reference to the Company's Definitive Proxy Statement on Schedule
14A filed April 16, 1998.

10.9 Money Purchase Plan Agreement of Measurements Group, Inc. Incorporated
by reference to Exhibit 10(a)(6) to Amendment No. 1 to the Company's
Registration Statement on Form S-7 (No. 2-69970).


41


10.10 Agreement Amending Supply Agreements among Cabot Corporation through
its Cabot Performance Materials Division, Vishay Sprague, Inc. and
Vishay Intertechnology, Inc. dated as of June 6, 2002.

21. Subsidiaries of the Registrant.

23. Consent of Independent Auditors.

99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 - Dr. Felix Zandman,
Chief Executive Officer.

99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 - Richard N. Grubb,
Chief Financial Officer.


42


SIGNATURES

Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

VISHAY INTERTECHNOLOGY, INC.

March 31, 2003 /s/ Felix Zandman
---------------------------
Felix Zandman, Chairman
of the Board and Chief
Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated below.

March 31, 2003 /s/ Felix Zandman
--------------------------
Felix Zandman, Chairman
of the Board and Chief
Executive Officer
(Principal Executive
Officer)

March 31, 2003 /s/ Avi D. Eden
--------------------------
Avi D. Eden, Vice-Chairman
of the Board, Executive
Vice President
and General Counsel

March 31, 2003 /s/Gerald Paul
--------------------------
Gerald Paul, Director,
President and Chief Operating
Officer

March 31, 2003 /s/Marc Zandman
--------------------------
Marc Zandman, Vice-Chairman
of the Board, President-Vishay
Israel Ltd.

March 31, 2003 /s/Richard N. Grubb
--------------------------
Richard N. Grubb, Director,
Executive Vice President,
Treasurer and Chief
Financial Officer
(Principal Financial and
Accounting Officer)

March 31, 2003 /s/Robert A. Freece
--------------------------
Robert A. Freece, Director,
Senior Vice President

March 31, 2003 /s/Eli Hurvitz
--------------------------
Eli Hurvitz, Director


43



March 31, 2003 /s/Abraham Ludomirski
--------------------------
Abraham Ludomirski, Director

March 31, 2003 /s/Edward B. Shils
--------------------------
Edward B. Shils, Director

March 31, 2003 /s/Ziv Shoshani
--------------------------
Ziv Shoshani, Director

March 31, 2003 /s/Mark I. Solomon
--------------------------
Mark I. Solomon, Director

March 31, 2003 /s/Jean-Claude Tine
--------------------------
Jean-Claude Tine, Director

March 31, 2003 /s/Ruta Zandman
--------------------------
Ruta Zandman, Director



44



CERTIFICATIONS

I, Dr. Felix Zandman, certify that:

1. I have reviewed this annual report on Form 10-K of Vishay
Intertechnology, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.


Date: March 31, 2003

/s/ Dr. Felix Zandman
- ---------------------
Dr. Felix Zandman
Chief Executive Officer



45


I, Richard N. Grubb, certify that:

1. I have reviewed this annual report on Form 10-K of Vishay
Intertechnology, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: March 31, 2003

/s/ Richard N. Grubb,
- ---------------------
Richard N. Grubb,
Chief Financial Officer



46


Vishay Intertechnology, Inc.

Consolidated Financial Statements

Years ended December 31, 2002, 2001, and 2000





Contents

Report of Independent Auditors...............................................F-1

Audited Consolidated Financial Statements

Consolidated Balance Sheets..................................................F-2
Consolidated Statements of Operations........................................F-4
Consolidated Statements of Cash Flows........................................F-5
Consolidated Statements of Stockholders' Equity..............................F-7
Notes to Consolidated Financial Statements...................................F-9





Report of Independent Auditors

Board of Directors and Stockholders
Vishay Intertechnology, Inc.

We have audited the accompanying consolidated balance sheets of Vishay
Intertechnology, Inc. as of December 31, 2002 and 2001, and the related
consolidated statements of operations, cash flows, and stockholders' equity for
each of the three years in the period ended December 31, 2002. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Vishay
Intertechnology, Inc. at December 31, 2002 and 2001, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States.

As discussed in Note 1 to the consolidated financial statements, in 2002 the
Company changed its method of accounting for goodwill .

Philadelphia, PA
February 6, 2003 /s/ Ernst & Young, LLP



F-1



Vishay Intertechnology, Inc.

Consolidated Balance Sheets

(In thousands, except per share and share amounts)



December 31
2002 2001
---------------------------

Assets
Current assets:
Cash and cash equivalents $ 339,938 $ 367,115
Accounts receivable, less allowances of $18,172 and $17,126 343,511 382,358
Inventories:
Finished goods 219,769 260,161
Work in process 142,846 136,842
Raw materials 191,451 204,454
Deferred income taxes 47,297 63,084
Prepaid expenses and other current assets 188,881 160,613
---------------------------
Total current assets 1,473,693 1,574,627



Property and equipment - at cost:
Land 118,000 92,311
Buildings and improvements 339,869 289,672
Machinery and equipment 1,609,931 1,397,262
Construction in progress 61,830 82,269
---------------------------
2,129,630 1,861,514
Less allowances for depreciation (854,780) (693,981)
---------------------------
1,274,850 1,167,533


Goodwill 1,356,293 1,077,790


Other intangible assets, net of amortization of $8,187 and $1,017 122,417 83,337


Other assets 87,906 48,236
---------------------------
Total assets $ 4,315,159 $ 3,951,523
===========================




F-2






December 31
2002 2001
---------------------------

Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $ 18,161 $ 11,241
Trade accounts payable 123,999 89,467
Payroll and related expenses 103,184 71,841
Other accrued expenses 303,609 292,596
Income taxes 8,734 13,081
Current portion of long-term debt 18,550 367
---------------------------
Total current liabilities 576,237 478,593

Long-term debt - less current portion 706,316 605,031
Deferred income taxes 52,935 90,340
Deferred income 42,345 57,208
Minority interest 75,985 66,516
Other liabilities 279,462 139,273
Accrued pension costs 223,092 148,017

Stockholders' equity:
Preferred Stock, par value $1.00 per share:
authorized - 1,000,000 shares; none issued
Common Stock, par value $.10 per share:
authorized - 300,000,000 shares; 144,297,101 and 143,795,355
shares outstanding after deducting 332,850 shares in treasury 14,429 14,380
Class B convertible Common Stock, par value $.10 per share:
authorized - 40,000,000 shares; 15,383,581 and 15,496,634
shares outstanding after deducting 279,453 shares in treasury 1,538 1,550
Capital in excess of par value 1,910,994 1,865,979
Retained earnings 523,354 615,968
Unearned compensation (413) (921)
Accumulated other comprehensive loss (91,115) (130,411)
---------------------------
Total stockholders' equity 2,358,787 2,366,545
---------------------------
Total liabilities and stockholders' equity $ 4,315,159 $ 3,951,523
===========================




See accompanying notes.


F-3



Vishay Intertechnology, Inc.

Consolidated Statements of Operations

(In thousands, except per share and share amounts)



Year ended December 31
2002 2001 2000
-----------------------------------------------

Net sales $ 1,822,813 $ 1,655,346 $ 2,465,066
Costs of products sold 1,454,540 1,273,827 1,459,784
-----------------------------------------------
Gross profit 368,273 381,519 1,005,282

Selling, general, and administrative expenses 311,251 278,171 297,315
Amortization of goodwill - 11,190 11,469
Restructuring expense 30,970 61,908 -
Loss on long-term purchase commitments 106,000 - -
Purchased research and development - 16,000 -
-----------------------------------------------
(79,948) 14,250 696,498

Other income (expense):
Interest expense (28,761) (16,848) (25,177)
Other 8,664 12,701 18,904
-----------------------------------------------
(20,097) (4,147) (6,273)
-----------------------------------------------
(Loss) earnings before income taxes (benefit)
and minority interest (100,045) 10,103 690,225
Income taxes (benefit) (16,900) 5,695 148,186
Minority interest 9,469 3,895 24,175
-----------------------------------------------
Net (loss) earnings $ (92,614) $ 513 $ 517,864
===============================================

Basic (loss) earnings per share $ (0.58) $ 0.00 $ 3.83
===============================================
Diluted (loss) earnings per share $ (0.58) $ 0.00 $ 3.77
===============================================

Weighted average shares outstanding:
Basic 159,413,000 141,171,000 135,295,000
Diluted 159,413,000 142,514,000 137,463,000




See accompanying notes.


F-4



Vishay Intertechnology, Inc.

Consolidated Statements of Cash Flows

(In thousands)



Year ended December 31
2002 2001 2000
------------------------------------

Operating activities
Net (loss) earnings $ (92,614) $ 513 $ 517,864
Adjustments to reconcile net (loss) earnings to
net cash provided by operating activities:
Depreciation and amortization 180,748 163,387 140,840
Gain on sale of subsidiaries - - (5,851)
Loss (gain) on disposal of property and
equipment 296 (1,472) 2,320
Minority interest in net earnings of
consolidated subsidiaries 9,469 3,895 24,175
Equity in earnings of affiliate - - 2,577
Purchased research and development - 16,000 -
Noncash charge for change in fair value of
interest rate swap 115 3,668 -
Accretion of interest on convertible debentures 9,325 5,313 -
Writedowns of property and equipment included
in restructuring expense 12,363 20,975 -
Loss on long-term purchase commitments 106,000 - -
Changes in operating assets and liabilities,
net of effects of businesses acquired or sold: 106,818
Accounts receivable 102,322 120,095 (148,414)
Inventories 106,818 6,038 (140,084)
Prepaid expenses and other current assets 6,257 (7,321) (62,687)
Accounts payable 455 (71,761) 28,507
Other current liabilities (29,766) (105,685) 106,084
Other (44,917) 7,773 76,988
------------------------------------
Net cash provided by operating activities 366,871 161,418 542,319

Investing activities
Purchases of property and equipment (110,074) (162,493) (229,781)
Proceeds from sale of property and equipment 20,621 9,911 7,267
Purchases of businesses, net of cash acquired (278,735) (172,468) (42,384)
Net cash proceeds from divestitures - - 33,162
------------------------------------
Net cash used in investing activities (368,188) (325,050) (231,736)




(Continues on following page.)


F-5



Vishay Intertechnology, Inc.

Consolidated Statements of Cash Flows (continued)

(In thousands)



Year ended December 31
2002 2001 2000
-------------------------------------

Financing activities
Net payments on revolving credit lines $ (14,000) $(100,047) $(506,686)
Proceeds from long-term borrowings 201 415 -
Principal payments on long-term debt (17,217) (444) (385)
Proceeds from convertible subordinated debentures - 294,096 -
Purchase of treasury stock - (850) (5,765)
Proceeds from sale of common stock - - 395,449
Proceeds from stock options exercised 3,161 854 39,873
Net changes in short-term borrowings (10,452) 3,274 39
-------------------------------------
Net cash (used in) provided by financing activities (38,307) 197,298 (77,475)
Effect of exchange rate changes on cash 12,447 (3,764) (1,088)
-------------------------------------
(Decrease) increase in cash and cash equivalents (27,177) 29,902 232,020

Cash and cash equivalents at beginning of year 367,115 337,213 105,193
-------------------------------------
Cash and cash equivalents at end of year $ 339,938 $ 367,115 $ 337,213
=====================================




See accompanying notes.


F-6


Vishay Intertechnology, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands, except share amounts)



Class B Capital Accumulated
Convertible in Excess Other Total
Common Common of Retained Unearned Comprehensive Stockholders'
Stock Stock Par Value Earnings Compensation Income (Loss) Equity
-------------------------------------------------------------------------------------------

Balance at January 1, 2000 $ 11,147 $ 1,556 $ 985,393 $ 97,591 $(1,086) $ (81,009) $ 1,013,592
Net earnings - - - 517,864 - - 517,864
Foreign currency translation adjustment - - - - - (32,468) (32,468)
Pension liability adjustment - - - - - (94) (94)
----------
Comprehensive income 485,302
----------
Stock issued (53,716 shares) 5 - 1,699 - (1,704) - -
Stock options exercised (2,656,171
shares) 266 - 39,607 - - - 39,873
Conversions from Class B to common
(36,347 shares) 4 (4) - - - - -
Common stock repurchase (200,000 shares) (20) - (5,745) - - - (5,765)
Sale of common stock (8,392,500 shares) 839 - 394,610 - - - 395,449
Termination of Lite-On stock
appreciation rights - - (108,495) - - - (108,495)
Tax effects relating to stock plan - - 12,357 - - - 12,357
Amortization of unearned compensation - - - - 1,542 - 1,542
------------------------------------------------------------------------------------------
Balance at December 31, 2000 12,241 1,552 1,319,426 615,455 (1,248) (113,571) 1,833,855
Net earnings - - - 513 - - 513
Foreign currency translation adjustment - - - - - (7,638) (7,638)
Pension liability adjustment - - - - - (8,557) (8,557)
Cumulative effect of adoption of SFAS
No. 133 - - - - - 51 51
Loss on derivative financial
instruments, net of taxes of $374 - - - - - (696) (696)
----------
Comprehensive loss (16,327)
----------
Stock issued (22,573 shares) 2 - 443 - (446) - (1)
Stock options exercised (85,877 shares) 9 - 845 - - - 854
Conversions from Class B to common
(21,917 shares) 2 (2) - - - - -
Common stock repurchase (48,500 shares) (5) - (846) - - - (851)
Tax effects relating to stock plan - - 423 - - - 423
Amortization of unearned compensation - - - - 773 - 773

F-7



Stock issued - General Semiconductor
acquisition (21,305,127 shares) 2,131 - 497,688 - - - 499,819
Stock options issued - General
Semiconductor acquisition - - 48,000 - - - 48,000
------------------------------------------------------------------------------------------
Balance at December 31, 2001 14,380 1,550 1,865,979 615,968 (921) (130,411) 2,366,545
Net loss - - - (92,614) - - (92,614)
Foreign currency translation adjustment - - - - - 64,343 64,343
Pension liability adjustment - - - - - (23,230) (23,230)
Loss on derivative financial
instruments, net of taxes of $474 - - - - - (1,817) (1,817)
----------
Comprehensive loss (53,318)
----------
Stock issued (127,270 shares) 11 - 2,124 - (135) - 2,000
Stock options exercised (260,720 shares) 26 - 3,135 - - - 3,161
Conversions from Class B to common
(113,053 shares) 12 (12) - - - - -
Warrants issued - BCcomponents
acquisition - - 39,462 - - - 39,462
Tax effects relating to stock plan - - 294 - - - 294
Amortization of unearned compensation - - - - 643 - 643
------------------------------------------------------------------------------------------
Balance at December 31, 2002 $ 14,429 $ 1,538 $ 1,910,994 $ 523,354 $ (413) $ (91,115) $ 2,358,787
==========================================================================================


See accompanying notes.



F-8


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements

December 31, 2002

Vishay Intertechnology, Inc. is an international manufacturer and supplier of
passive and active electronic components, including resistors, capacitors,
inductors, strain gages, load cells, force measurement sensors, displacement
sensors, photoelastic sensors, power MOSFETS, power conversion and motor control
integrated circuits, transistors, diodes and optoelectronic components.
Electronic components manufactured by the Company are used in virtually all
types of electronic products, including those in the computer,
telecommunications, military/aerospace, instrument, automotive, medical, and
consumer electronics industries.

1. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Vishay
Intertechnology, Inc. and its majority-owned subsidiaries, after elimination of
all significant intercompany transactions, accounts, and profits. Investments in
20%- to 50%-owned companies are accounted for on the equity method. Investments
in other companies are carried at cost.

Revenue Recognition

The Company recognizes revenue when products are shipped to customers. The
Company has agreements with distributors that provide limited rights of return
and protection against price reductions initiated by the Company. The effect of
these programs is estimated based on historical experience and provisions are
recorded at the time of shipment.

Shipping and Handling Costs

Shipping and handling costs are included in costs of products sold.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ significantly from those
estimates.


F-9


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


1. Summary of Significant Accounting Policies (continued)

Inventories

Inventories are stated at the lower of cost, determined by the first-in,
first-out method, or market.

Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. The
allowance is determined through an analysis of the aging of accounts receivable
and assessments of risk that are based on historical trends and an evaluation of
the impact of current and projected economic conditions. The Company evaluates
the past-due status of its trade receivables based on contractual terms of sale.
If the financial condition of the Company's customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required. Bad debt expense was $6,672,000, $7,112,000 and
$3,020,000 for the years ended December 31, 2002, 2001, and 2000, respectively.

Depreciation

Depreciation is computed principally by the straight-line method based upon the
estimated useful lives of the assets. Machinery and equipment are being
depreciated over useful lives of seven to ten years. Buildings and building
improvements are being depreciated over useful lives of twenty to forty years.
Depreciation of capital lease assets is included in total depreciation expense.
Depreciation expense was $172,174,000, $149,225,000, and $126,285,000, for the
years ended December 31, 2002, 2001, and 2000, respectively.

Construction in Progress

The estimated cost to complete construction in progress at December 31, 2002 was
$21,838,000.

Goodwill and Other Intangible Assets

The Company adopted Statements of Financial Accounting Standards ("SFAS") No.
141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets,
effective January 1, 2002.


F-10

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Goodwill and Other Intangible Assets (continued)

The most significant changes made by SFAS 142 were: (1) goodwill and indefinite
lived intangible assets will no longer be amortized, (2) goodwill will be tested
for impairment at least annually at the reporting unit level, (3) intangible
assets deemed to have an indefinite life will be tested for impairment at least
annually, and (4) the amortization period of intangible assets with finite lives
will no longer be limited to forty years. SFAS 142 prescribes a two-step method
for determining goodwill impairment. In the first step, we determine the fair
value of the reporting unit using a comparable companies market multiple
approach. If the net book value of the reporting unit exceeds the fair value, we
would then perform the second step of the impairment test which requires
allocation of the reporting unit's fair value to all of its assets and
liabilities in a manner similar to a purchase price allocation, with any
residual fair value being allocated to goodwill. The fair value of the goodwill
is then compared to its carrying amount to determine impairment. An impairment
charge will be recognized only when the implied fair value of a reporting unit's
goodwill is less than its carrying amount. SFAS 142 requires the Company to
perform transitional impairment tests of its trademarks and goodwill as of
January 1, 2002, as well as perform impairment tests on an annual basis and
whenever events or circumstances occur indicating that the trademarks or
goodwill may be impaired.

The Company has identified the following reporting units and associated goodwill
(in thousands):




Measurements
Actives Passives Group Total
-----------------------------------------------


Goodwill Balance at December 31, 2002 $861,201 $462,251 $32,841 $1,356,293



The Company has assigned an indefinite useful life to its trademarks
($56,000,000) and discontinued the amortization of both its goodwill and
trademarks. Completed technology ($67,000,000) is being amortized over useful
lives of seven to ten years. Noncompete agreements ($7,604,000) are being
amortized over a period of one to five years. Amortization expense was
$7,171,000, $1,017,000, and $0 for the years ended



F-11


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

December 31, 2002, 2001, and 2000, respectively. Estimated annual amortization
expense for each of the next five years is as follows: 2003 - $11,248,000; 2004
- - $8,414,000; 2005 - $7,993,000; 2006 - $7,593,000; and 2007 - $7,593,000.

The Company completed the transitional impairment test of its trademarks as of
January 1, 2002. The fair value of the trademarks, as determined by an
independent appraiser, was measured as the discounted cash flow savings realized
from owning such trademarks and not having to pay a royalty for their use. No
impairment of the trademarks was determined to exist at January 1, 2002. An
annual impairment test of trademarks was completed as of October 1, 2002, with
no impairment recognized.

The Company completed a transitional goodwill impairment test as of January 1,
2002. Fair value of reporting units was determined using comparable company
market multiples. The Company determined that there was no goodwill impairment
as of January 1, 2002.

The Company performed an additional goodwill impairment test, as required under
SFAS 142, with particular attention to the Company's market capitalization as
compared with the Company's net asset value at September 30, 2002. The Company
determined that there was no goodwill impairment. The Company's required annual
impairment test will be performed on October 1st of each subsequent year.

The interim impairment test of goodwill was performed in accordance with the
provisions of SFAS 142, which states that, if an event occurs or circumstances
change that would more likely than not reduce the fair value of a reporting unit
below its carrying amount, an impairment test is required. During the nine
months ended September 30, 2002, events and circumstances indicated that
approximately $204 million of goodwill of the passives reporting unit might be
impaired. However, the Company's estimate of fair value of the passives
reporting unit using a comparable companies market multiple approach indicated
that the fair value of the reporting unit exceeded its net book value.
Nonetheless, it is reasonably possible that the fair value of the passives
reporting unit may decrease in the near term resulting in the need to write down
that goodwill to fair value.



F-12


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Long-Lived Assets

The Company evaluates impairment of its intangible assets subject to
amortization and other long-lived assets, other than goodwill and intangible
assets not subject to amortization, in accordance with SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, which has been adopted by
the Company as of January 1, 2002. SFAS 144 requires an impairment loss to be
recognized only if the carrying amounts of long-lived assets to be held and used
are not recoverable from their expected undiscounted cash flows. Adoption of
SFAS 144 had no effect on the Company's financial position or its results of
operations.

Cash Equivalents

Cash and cash equivalents includes demand deposits and highly liquid investments
with maturities of three months or less when purchased.

Research and Development Expenses

The amount charged to expense for research and development (exclusive of
purchased in-process research and development) aggregated $37,095,000,
$30,176,000, and $37,103,000 for the years ended December 31, 2002, 2001, and
2000, respectively. The Company spends additional amounts for the development of
machinery and equipment for new processes and for cost reduction measures.

Grants

Grants received by certain foreign subsidiaries from foreign governments,
primarily in Israel, are recognized as income in accordance with the purpose of
the specific contract and in the period in which the related expense is
incurred. Grants from the Israeli government recognized as a reduction of costs
of products sold were $17,322,000, $19,064,000, and $15,721,000 for the years
ended December 31, 2002, 2001, and 2000, respectively. Grants receivable of
$16,374,000 and $14,858,000 are included in other current assets at December 31,
2002 and 2001, respectively. Deferred grant income was $42,345,000 and
$57,208,000 at December 31, 2002 and 2001, respectively. The grants are subject
to certain conditions, including maintaining specified levels of employment for
periods up to ten years. Noncompliance with such conditions could result in the
repayment of grants. However, management expects that the Company will comply
with all terms and conditions of the grants.


F-13

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Minority Interest

Minority interest represents the ownership interests of third parties in the net
assets and results of operations of certain consolidated subsidiaries.

Stock-Based Compensation

SFAS No. 123, Accounting for Stock-Based Compensation, encourages entities to
record compensation expense for stock-based employee compensation plans at fair
value but provides the option of measuring compensation expense using the
intrinsic value method prescribed in APB Opinion No. 25, Accounting for Stock
Issued to Employees. The Company accounts for stock-based compensation in
accordance with APB 25 and related interpretations. The following is provided to
comply with the disclosure requirements of SFAS 123 as amended. If compensation
cost for the Company's stock option programs had been determined using the
fair-value method prescribed by SFAS 123, the Company's results would have been
reduced to the pro forma amounts indicated below (in thousands, except per share
amounts):




Year ended December 31
2002 2001 2000
-----------------------------------------


Net (loss) income, as reported $ (92,614) $ 513 $ 517,864
Deduct: Total stock-based employee compensation
expense determined under fair value-based
method for all awards, net of related
tax effects (2,430) (3,742) (2,568)
-----------------------------------------
Pro forma net (loss) income $ (95,044) $ (3,229) $ 515,296
=========================================

Earnings (loss) per share:
Basic--as reported $ (0.58) $ 0.00 $ 3.83
=========================================
Basic--pro forma $ (0.60) $ (0.02) $ 3.81
=========================================

Diluted--as reported $ (0.58) $ 0.00 $ 3.77
=========================================
Diluted--pro forma $ (0.60) $ (0.02) $ 3.75
=========================================




F-14

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Stock-Based Compensation (continued)

The weighted average fair value of the options granted was estimated using the
Black-Scholes option-pricing model, with the assumptions presented below. All
options granted in 2002 had a weighted average fair value of $8.62 and an
exercise price equal to the market value. All options granted in 2000 had a
weighted average fair value of $11.64 and a weighted average exercise price of
$25.34.

2002 2000
Grants Grants
----------------------------------------
Expected dividend yield - -
Risk-free interest rate 3.5% 5.8%
Expected volatility 63.2% 58.2%
Expected life (in years) 4.5 4.7


Derivative Financial Instruments

Effective January 1, 2001, the Company adopted SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS 133 requires all derivative
instruments to be recognized as either assets or liabilities and measured at
fair value. The accounting for changes in fair value depends upon the purpose of
the derivative instrument and whether it is designated and qualifies for hedge
accounting. The Company uses interest rate swap agreements to modify variable
rate obligations to fixed rate obligations, thereby reducing exposure to market
rate fluctuations. The interest rate swap agreements are designated as hedges.
The effective portion of gains or losses is reported in other comprehensive
income and the ineffective portion, if any, is reported in net income (loss).

Commitments and Contingencies

Liabilities for loss contingencies, including environmental remediation costs,
arising from claims, assessments, litigation, fines, penalties, and other
sources are recorded when it is probable that a liability has been incurred and
the amount of the assessment and/or remediation can be reasonably estimated. The
costs for a specific environmental cleanup

F-15



1. Summary of Significant Accounting Policies (continued)

Commitments and Contingencies (continued)

site are discounted if the aggregate amount of the obligation and the amount and
timing of the cash payments for that site are fixed or reliably determinable
generally based upon information derived from the remediation plan for that
site. Recoveries from third parties that are probable of realization and can be
reasonably estimated are separately recorded, and are not offset against the
related environmental liability.

Accounting Pronouncements Pending Adoption

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. In
addition to other technical provisions, this Statement rescinds SFAS No. 4,
which required all gains and losses from extinguishment of debt to be aggregated
and, if material, classified as an extraordinary item, net of tax. The
provisions of SFAS 145 will be adopted by the Company on January 1, 2003.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. This Statement nullifies EITF Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring). SFAS
146 requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred rather than at the date of
an entity's commitment to an exit plan. The provisions of SFAS 146 will be
adopted by the Company for exit or disposal activities initiated after December
31, 2002.

Reclassifications

Certain prior-year amounts have been reclassified to conform to the current
financial statement presentation.


F-16



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures

Year ended December 31, 2002

In January 2002, the Company acquired the transducer and strain gage businesses
of Sensortronics, Inc. Sensortronics is a leading manufacturer of load cells and
torque transducers for domestic and international customers in a wide range of
industries with manufacturing facilities in Covina, California, Costa Rica, and,
under a joint venture arrangement, India. The acquisition included the wholly
owned subsidiary of Sensortronics, JP Technologies, a manufacturer of strain
gages, located in San Bernardino, California. The purchase price was $10 million
in cash. The purchase price has been allocated, with resulting goodwill of
$3,027,000. The results of operations of Sensortronics are included in the
results of the passives segment from January 31, 2002.

In June 2002, the Company acquired Tedea-Huntleigh BV, a subsidiary of Tedea
Technological Development and Automation Ltd. Tedea-Huntleigh BV is engaged in
the production and sale of load cells used in digital scales by the weighing
industry. The purchase price was approximately $21 million in cash.
Additionally, Vishay will pay Tedea a $1 million consulting fee over a
three-year period and repaid a $9 million loan of Tedea to Tedea-Huntleigh.
Tedea-Huntleigh operates two plants in Israel, in Netanya and Carmiel, where it
employs approximately 350 people, as well as a number of facilities outside
Israel. Tedea-Huntleigh also has load cell operations in the Peoples Republic of
China. The purchase price has been allocated, with resulting goodwill of
$13,841,000. Results of operations are included in the passives segment
beginning July 1, 2002.

On July 31, 2002, the Company acquired the BLH and Nobel businesses of Thermo
Electron Corporation. BLH and Nobel are engaged in the production and sale of
load cell-based process weighing systems, weighing and batching instruments, web
tension instruments, weighing scales, servo control systems, and components
relating to load cells including strain gages, foil gages, and transducers. The
purchase price was $18.5 million in cash. The purchase price has been allocated,
with resulting goodwill of $11,262,000. The results of operations are included
in the passives segment beginning August 1, 2002.

In October 2002, the Company acquired Celtron Technologies. Celtron is engaged
in the production and sale of load cells used in digital scales for the weighing
industry, with manufacturing facilities and offices in Taiwan, the Peoples
Republic of China, and California. The purchase price of $13.5 million in cash
has been allocated with resulting goodwill of $4,711,000.


F-17

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures (continued)

On December 13, 2002, the Company acquired BCcomponents Holdings B.V., a leading
manufacturer of passive components with operations in Europe, India, and the Far
East. The product lines of BCcomponents include linear and non-linear resistors;
ceramic, film and aluminum electrolytic capacitors; and switches and trimming
potentiometers.

Vishay acquired the outstanding shares of BCcomponents in exchange for ten-year
warrants to acquire 7,000,000 shares of Vishay common stock at an exercise price
of $20.00 per share and ten-year warrants to acquire 1,823,529 shares of Vishay
common stock at an exercise price of $30.30 per share.

In the transaction, outstanding obligations of BCcomponents, including
indebtedness and transaction fees and expenses, in the amount of approximately
$224 million were paid ($191,000,000) or assumed ($33,000,000). Also, $105
million in principal amount of BCcomponents' mezzanine indebtedness and certain
other securities of BCcomponents were exchanged for $105 million principal
amount of floating rate unsecured loan notes of Vishay due 2102. The Vishay
notes bear interest at LIBOR plus 1.5% through December 31, 2006 and at LIBOR
thereafter. The interest note could be further reduced to 50% of LIBOR after
December 31, 2010 if the price of Vishay common stock trades above a specified
target price, as provided in the notes. The notes are subject to a put and call
agreement under which the holders may at any time put the notes to Vishay in
exchange for 6,176,471 shares of Vishay common stock in the aggregate, and
Vishay may call the notes in exchange for cash or for shares of its common stock
after 15 years from the date of issuance. The purchase price was as follows:


Cash consideration $191,000,000
Warrants issued 39,462,000
Acquisition costs 3,000,000
------------
Total purchase price $233,462,000
============


Under purchase accounting, the total purchase price is allocated to assets
acquired and liabilities assumed based on their estimated fair values. The
allocation of the purchase price is based on a preliminary evaluation of the
fair value of BCcomponents' tangible and identifiable intangible assets acquired
and liabilities assumed at the date of the merger based upon currently available
information. There can be no assurance that the



F-18

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures (continued)

estimated amounts represent the final purchase allocation. The purchase price
has been preliminarily allocated, pending finalization of appraisals for
property, plant, and equipment, debt, intangible assets and warrants, to the
acquired assets and liabilities based on fair values as follows:

Current assets $ 96,071,000
Property, plant, and equipment 127,626,000
Other assets 4,805,000
Trademarks 21,000,000
Completed technology 22,000,000

Current liabilities (118,238,000)
Long-term debt (126,328,000)
Other noncurrent liabilities (29,527,000)
Goodwill 236,053,000
-------------
Total purchase price $ 233,462,000
=============


In connection with the BCcomponents acquisition, the Company recorded
restructuring liabilities of $48,000,000 in connection with an exit plan that
management began to formulate prior to the acquisition date. Approximately
$46,000,000 of these liabilities relate to employee termination costs covering
approximately 780 technical, production, administrative and support employees
located in the United States, Europe, and the Pacific Rim. The liability is
recorded in other accrued expenses and is expected to be paid out by December
31, 2003. The exit plan is not yet finalized. Future adjustments to increase or
decrease the restructuring liabilities would increase or decrease goodwill.

Year ended December 31, 2001

In January 2001, the Company purchased Tansitor, a manufacturer of wet tantalum
electrolytic capacitors and miniature conformal coated solid tantalum
capacitors, for $18.3 million in cash. The acquisition was accounted for as a
purchase and included in the results of operations of the passives segment from
January 1, 2001.

On July 27, 2001, the Company agreed to purchase from Infineon Technologies AG,
Munich, the Infineon optoelectronic infrared components business. This business
produces optocouplers and optoelectric infrared data components transceivers
(IRDC). The total purchase price for this transaction was approximately $116
million in cash. A partial payment of $78 million was made on July 27, 2001. A
second payment of


F-19

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures (continued)

$38 million was made on December 31, 2001 to acquire a manufacturing facility in
Malaysia. Under the terms of the agreement, the Company purchased Infineon's
U.S. development, marketing, and distribution activities located in the San
Jose, California headquarters and a manufacturing facility located in Malaysia.
The results of operations of Infineon's U.S. infrared components business are
included in the results of the actives segment from July 27, 2001. The results
of operations of the Malaysia facility are included from December 31, 2001, its
acquisition date. The purchase price was allocated to the acquired assets and
liabilities based on fair values as follows:

Current assets $ 28,121,000
Property, plant, and equipment 27,575,000
Completed technology 8,000,000
Other assets 226,000


Current liabilities (14,200,000)
Goodwill 66,351,000
--------------
Total purchase price $ 116,073,000
==============


On November 2, 2001, the Company acquired General Semiconductor, Inc., a leading
manufacturer of rectifiers and power management devices, following approval of
the transaction and related matters by stockholders of the two companies, for
$554.8 million, including acquisition expenses of $7.0 million. Stockholders of
General Semiconductor received 0.563 shares of Vishay Common Stock for each
General Semiconductor share in a tax-free exchange. The Company used an average
closing price of its common stock for the period beginning three trading days
immediately prior to the date the acquisition was announced (August 1, 2001) and
ending the three trading days immediately thereafter, or an average of $23.46
per share. The aggregate fair value was determined by multiplying the total
number of shares of Vishay Common Stock issued (21,305,127) by $23.46 per share
(determined as described above), or approximately $499,818,000. The Company
assumed General Semiconductor options that became exercisable for 4.3 million
shares of Vishay Common Stock, with a fair value of $48 million. The fair value
of the options issued was determined using the Black-Scholes method. The
significant assumptions used included an expected dividend yield of 0.0%, a
risk-free interest rate of 3%, an expected volatility of 66%, and an expected
life of five years. General Semiconductor


F-20

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures (continued)

also had outstanding $172.5 million principal amount of 5.75% convertible notes,
of which $1.5 million principal amount was repurchased by the Company in January
2002. As a result of the acquisition, the notes that remain outstanding are
convertible into approximately 6.2 million shares of Vishay Common Stock. The
results of operations of General Semiconductor are included in the results of
the actives segment from November 2, 2001. The final purchase allocation is as
follows:

Current assets $ 153,115,000
Property, plant, and equipment 184,524,000
Other assets 7,896,000
Noncompete agreements 5,604,000
Trademarks 35,000,000
Completed technology 37,000,000
Purchased in-process technology 16,000,000

Current liabilities (188,410,000)
Long-term debt (255,502,000)
Other noncurrent liabilities (111,290,000)
Goodwill 670,909,000
-------------
Total purchase price $ 554,846,000
=============


In connection with the General Semiconductor acquisition, the Company recorded
restructuring liabilities of $94,643,000 in connection with an exit plan that
management began to formulate prior to the acquisition date. The exit plan
includes downsizing certain European and Taiwan facilities and moving production
to low labor cost areas such as Israel, Czech Republic, and China. The exit plan
should be completed by the second quarter of 2003. The plan also includes
reducing selling, general and administrative expenses through the integration or
elimination of redundant sales offices and administrative functions at General
Semiconductor. The goal of the Company is achieving significant production cost
savings through the transfer and expansion of manufacturing operations to
regions such as Israel, the Czech Republic, and the People's Republic of China,
where the Company can take advantage of lower labor costs and available tax and
other government-sponsored incentives. Approximately $88,242,000 of these
restructuring liabilities related to employee termination costs covering
approximately 1,460 technical, production, administrative and support employees
located in the United States, Europe, and the Pacific Rim. The remaining
$6,401,000 related to provisions for lease



F-21

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures (continued)

cancellations and other costs. The liability is included in other accrued
expenses on the consolidated balance sheet and the workforce reduction costs are
expected to be paid out by the second quarter of 2003. The other costs are
expected to be paid out by 2005. Any changes in estimates to the restructuring
liability have changed the purchase allocation. A rollforward of the activity in
these restructuring liabilities is as follows (in thousands, except number of
employees):



Number
Workforce of Employees Total
Reduction Other Terminated
--------------------------------------------------------

Balance at January 1, 2002 $ 88,242 $ 6,401 1,460 $ 94,643
Cash paid (52,118) (1,249) (426) (53,367)
Changes in estimate (7,900) - (147) (7,900)
--------------------------------------------------------
Balance at December 31, 2002 $ 28,224 $ 5,152 887 $ 33,376
========================================================



On November 7, 2001, the Company acquired Yosemite Investment, Inc. d/b/a North
American Capacitor Company, also known as Mallory, for approximately $45 million
in cash. With manufacturing facilities in Greencastle, Indiana and Glasgow,
Kentucky, Mallory is a leading manufacturer of wet tantalum electrolytic
capacitors, among other businesses. Subsequently, in February 2002, Vishay sold
the audible signal business of Mallory for $4,925,000, consisting of $3,925,000
in cash and a $1,000,000 promissory note and recognized no gain or loss. On
April 1, 2002, the Company sold the resale business of Mallory for $8.8 million,
consisting of $7.6 million in cash and a $1.2 million subordinated promissory
note and recognized no gain or loss. The purchase price was allocated to the
acquired assets and liabilities based on fair values as follows:

Current assets $ 11,033,000
Property, plant, and equipment 6,347,000


Current liabilities (3,555,000)
Long-term debt (857,000)
Goodwill 31,684,000
------------
Total purchase price $ 44,652,000
============



F-22

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)

2. Acquisitions and Divestitures (continued)

The BLH, Tansitor, Celtron, Nobel, Tedea-Huntleigh, Sensortronics, Mallory and
Infineon acquisitions were funded with cash on hand and borrowings under
Vishay's revolving credit facility.

Had all of the above acquisitions been made at the beginning of the respective
periods, the Company's pro forma unaudited results would have been (in
thousands, except per share amounts):

Year ended December 31
2002 2001
----------------------------------------

Net sales $ 2,095,657 $ 2,415,651
Net loss (132,000) (86,788)

Basic and diluted loss per share (0.83) (0.55)


The pro forma information includes adjustments for interest expense that would
have been incurred to finance the acquisitions, adjustments to depreciation
based on the fair value of property, plant, and equipment acquired, write-off of
purchased in-process research and development, amortization of intangible assets
and related tax effects. Pro forma net loss for the year ended December 31,2001
includes pre-tax restructuring charges of $88,846,000 recorded by General
Semiconductor and BC components prior to acquisition. Goodwill related to the
acquisitions is not tax-deductible.

The unaudited pro forma results are not necessarily indicative of the results
that would have been attained had the acquisitions occurred at the beginning of
the periods presented.

Year ended December 31, 2000

During 2000, the Company acquired certain assets and assumed certain liabilities
of Spectrol Electronics Corporation and Spectrol Electronics Limited and
acquired 100% of the common stock of Cera-Mite Corporation and of Electro-Films,
Inc. The combined cash purchase price was $42,384,000. The results of operations
of Electro-Films, Cera-Mite, and Spectrol have been included in the Company's
results from June 1, 2000, August 1, 2000, and September 1, 2000, respectively.
The pro forma effect of these acquisitions was not material for 2000.


F-23

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


2. Acquisitions and Divestitures (continued)

On May 31, 2000, the Company entered into a definitive agreement for the sale of
its 65% interest in Lite-On Power Semiconductor Corporation (LPSC) to the
Lite-On Group for $40,736,000 in cash and the transfer to the Company of the
rights under the SARs (see Note 7) issued in July 1997. The fair value of the
SARs was $108,495,000 as of May 31, 2000. A pretax gain of $8,401,000 is
included in other income in 2000 in connection with the sale of the Company's
65% interest in LPSC.

On November 30, 2000, the Company sold V-Tech Latino Americana LTDA, its
Brazilian distribution subsidiary. In connection with the sale, the Company
received cash proceeds of approximately $400,000 and recorded a noncash pretax
loss of $2,550,000, which is included in other income (expense).

3. Goodwill

As discussed in Note 1, the Company adopted SFAS 142 on January 1, 2002. The
Company's net income and earnings per share adjusted to exclude goodwill
amortization were as follows:

Year ended December 31
2002 2001 2000
--------------------------------------------
(In thousands)

Reported net (loss) income $ (92,614) $ 513 $ 517,864
Add back: Goodwill amortization,
net of tax - 10,414 10,692
--------- -------- ---------
Adjusted net (loss) income (92,614) 10,927 528,556

Basic earnings per share:
Reported net (loss) income $ (0.58) $ 0.00 $ 3.83
Goodwill amortization, net of tax - 0.08 0.08
--------- -------- ---------
Adjusted net (loss ) income (0.58) 0.08 3.91

Diluted earnings per share:
Reported net (loss) income $ (0.58) $ 0.00 $ 3.77
Goodwill amortization, net of tax - 0.08 0.08
--------- -------- ---------
Adjusted net (loss) income (0.58) 0.08 3.85



F-24


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


3. Goodwill (continued)

The changes in the carrying amounts of goodwill by segment for the year ended
December 31, 2002 were as follows:



Actives Passives Total
------------------------------------------------------
(In thousands)


Balance at January 1, 2002 $ 864,375 $ 213,415 $ 1,077,790

Goodwill acquired during the year - 276,606 276,606
Purchase price adjustments (8,332) 830 (7,502)
Currency translation adjustments 5,158 4,241 9,399
------------------------------------------------------
Balance at December 31, 2002 $ 861,201 $ 495,092 $ 1,356,293
======================================================


4. Restructuring Expense

Restructuring expense reflects the cost reduction programs currently being
implemented by the Company. These include the closing of facilities and the
termination of employees. Restructuring costs are expensed during the period in
which we determine that we will incur those costs and all of the requirements of
accrual are met. Because these costs are recorded based upon estimates, our
actual expenditures for the restructuring activities may differ from the
initially recorded costs. We could be required either to record additional
expenses in future periods, if the initial estimates were too low, or to reverse
part of the charges that we recorded initially.


F-25


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


4. Restructuring Expense (continued)

Year ended December 31, 2002

Restructuring expense was $30,970,000 for the year ended December 31, 2002.
Restructuring of European and Israeli operations included $10,698,000 of
employee termination costs covering approximately 778 technical, production,
administrative and support employees located in Czech Republic, France, Hungary,
Israel, Portugal, and Austria. In the United States, $7,909,000 of restructuring
expense related to termination costs for approximately 660 technical,
production, administrative and support employees. The remaining $12,363,000 of
restructuring expense relates to the noncash writedown of building and equipment
that are no longer in use. The restructuring expense was incurred as part of the
cost reduction programs currently being implemented by the Company. The
restructuring activities related to existing business were designed to reduce
both fixed and variable costs, particularly in response to the reduced demand
for our products occasioned by the electronics industry downturn which began in
2001. Activity related to these costs is as follows (in thousands, except number
of employees):



Number of
Workforce Asset Employees
Reduction Impairment Terminated Total
---------------------------------------------------------------

Restructuring expense $ 18,607 $ 12,363 1,438 $ 30,970
Utilized (6,420) (12,363) (783) (18,783)

---------------------------------------------------------------
Balance at December 31, 2002 $ 12,187 $ - 655 $ 12,187
===============================================================



The remaining $12,187,000 of severance costs, currently shown in other accrued
expenses, should be paid by December 31, 2003.

Year ended December 31, 2001

Restructuring expense was $61,908,000 for the year ended December 31, 2001.
Restructuring of European, Asia Pacific, and Israeli operations included
$27,064,000 of employee termination costs covering approximately 3,778
technical, production, administrative and support employees located in France,
Hungary, Portugal, Austria, the Philippines, Germany, and Israel. The European
operations also recorded $2,191,000 of noncash costs associated with the
writedown of buildings and equipment that are no longer in use. In the United
States, $13,870,000 of restructuring expense relates to


F-26


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


4. Restructuring Expense (continued)

termination costs for approximately 1,885 technical, production, administrative
and support employees. The remaining $18,783,000 of restructuring expense
relates to the noncash writedown of buildings and equipment that are no longer
in use.

Activity related to these costs is as follows (in thousands, except number of
employees):

Number of
Workforce Asset Employees
Reduction Impairment Terminated Total
---------------------------------------------

Restructuring expense $ 40,934 $ 20,974 5,663 $ 61,908
Utilized (18,114) (20,974) (4,913) (39,088)
---------------------------------------------
Balance at December 31, 2001 22,820 - 750 22,820
Cash paid (19,865) - (612) (19,865)
Changes in estimate (1,391) - - (1,391)
---------------------------------------------
Balance at December 31, 2002 $ 1,564 $ - 138 $ 1,564
=============================================


The remaining $1,564,000 of severance costs, currently shown in other accrued
expenses, is expected to be paid by December 31, 2003.



5. Income Taxes

Earnings before income taxes and minority interest consists of the following
components:

Year ended December 31
2002 2001 2000
-------------------------------------------------------
(In thousands)

Domestic $ (59,882) $ (55,598) $ 177,852
Foreign (40,163) 65,701 512,373
-------------------------------------------------------
$ (100,045) $ 10,103 $ 690,225
=======================================================


F-27

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


5. Income Taxes (continued)

Significant components of income taxes are as follows:

Year ended December 31
2002 2001 2000
----------------------------------------------
(In thousands)
Current:
U.S $ (41,991) $ 6,194 $ 51,965
Foreign 6,111 9,197 11,936
State 776 641 4,744
----------------------------------------------
(35,104) 16,032 68,645

Deferred:
U.S 30,590 (12,392) 62,156
Foreign (16,152) 4,031 17,540
State 3,766 (1,976) (155)
----------------------------------------------
18,204 (10,337) 79,541
----------------------------------------------
$ (16,900) $ 5,695 $ 148,186
==============================================



F-28


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


5. Income Taxes (continued)

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts for income tax purposes. Significant components of the
Company's deferred tax assets and liabilities are as follows:

December 31
2002 2001
--------------------------
(In thousands)
Deferred tax assets:
Pension and other retiree obligations $ 47,710 $ 41,500
Net operating loss carryforwards 112,770 38,869
Tax credit carryforwards 11,766 13,080
Restructuring reserves 13,093 23,678
Other accruals and reserves 55,699 51,348
--------------------------
Total deferred tax assets 241,038 168,475
Less valuation allowance (63,192) (10,256)
--------------------------
177,846 158,219

Deferred tax liabilities:
Tax over book depreciation 87,483 88,377
Non-amortizable intangible assets 24,454 26,412
Other - net 30,359 16,284
--------------------------
Total deferred tax liabilities 142,296 131,073
--------------------------
Net deferred tax assets $ 35,550 $ 27,146
==========================



F-29



5. Income Taxes (continued)

A reconciliation of income tax expense at the U.S. federal statutory income tax
rate to actual income tax expense (benefit) is as follows:



Year ended December 31
2002 2001 2000
------------------------------------
(In thousands)


Tax at statutory rate $ (35,016) $ 3,536 $ 241,579
State income taxes, net of U.S. federal tax
benefit 2,540 (382) 3,064
Effect of foreign operations 11,090 (4,894) (99,520)
Purchased research and development - 5,600 -
Other 4,486 1,835 3,063

------------------------------------
$ (16,900) $ 5,695 $ 148,186
====================================



At December 31, 2002, the Company had the following significant net operating
loss carryforwards for tax purposes (in thousands):

Expires
-----------------

Czech Republic $ 608 2005 - 2007
France 8,720 2005 - 2007
Germany 50,560 No expiration
Israel 153,442 No expiration
Portugal 3,550 2005 - 2007
United States 58,236 2021


Approximately $25,280,000 of the carryforward in Germany resulted from the
Company's acquisition of Roederstein, GmbH in 1993. Valuation allowances of
$6,208,000 and $7,324,000 have been recorded at December 31, 2002 and 2001,
respectively, for deferred tax assets related to foreign net operating loss
carryforwards. In 2002 and 2001, respectively, tax benefits recognized through
reductions of the valuation allowance had the effect of reducing goodwill of
acquired companies by $491,000 and $4,901,000. If additional tax benefits are
recognized in the future through further reduction of the valuation allowance,
$2,523,000 of such benefits will reduce goodwill.


F-30

Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


5. Income Taxes (continued)


In addition, as part of the BCcomponents acquisition, the Company has the
following estimated pre-acquisition NOL carryforwards for tax purposes (in
thousands):


Expires
-------------

Austria $ 4,329 No expiration

Belgium 60,504 No expiration

Netherlands 74,688 No expiration


The Company has recorded valuation allowances against the deferred tax assets
arising from these net operating loss carryforwards. If the Company recognizes
future tax benefits through the use of these pre-acquisition losses, the benefit
of such utilization will be recorded as a reduction to goodwill.



F-31



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


5. Income Taxes (continued)

At December 31, 2002, the Company had the following tax credit carryforwards
available (in thousands):

Expires
------------------

Federal Alternative Minimum Tax $ 5,802 No expiration
California Investment Credit 5,644 2003 - 2009
California Research Credit 3,402 No expiration


At December 31, 2002, no provision had been made for U.S. federal and state
income taxes on approximately $897,550,000 of foreign earnings, which are
expected to be reinvested indefinitely. Upon distribution of those earnings in
the form of dividends or otherwise, the Company would be subject to U.S. income
taxes (subject to an adjustment for foreign tax credits), state income taxes,
and withholding taxes payable to the various foreign countries. Determination of
the amount of unrecognized deferred U.S. income tax liability is not practicable
because of the complexities associated with its hypothetical calculation.

Income taxes paid were $2,910,000, $72,953,000, and $45,703,000 for the years
ended December 31, 2002, 2001, and 2000, respectively.

6. Long-Term Debt

Long-term debt consists of the following:




December 31
2002 2001
--------------------------
(In thousands)


Multicurrency revolving credit loans $ 111,000 $125,000
Convertible subordinated notes, LYONs, due 2021 317,830 308,506
Other debt and capital lease obligations 21,689 1,390
Convertible unsecured notes, BCcomponents, due 2102 105,000 --
Convertible subordinated notes, GSI, due 2006 169,347 170,502
--------------------------
724,866 605,398
Less current portion 18,550 367
--------------------------
$ 706,316 $605,031
==========================



F-32



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


6. Long-Term Debt (continued)

On December 13, 2002, the Company entered into an amendment to its long-term
revolving credit and swing line facility. The aggregate commitment under this
facility was reduced from $660,000,000 to $500,000,000, subject to increase
under certain circumstances, and certain changes were made to other terms of the
facility. This facility, which matures on June 1, 2005, is subject to the
Company's right to request year-to-year renewals. Interest on the long-term
facility is payable at prime or other variable interest rate options. The
Company is required to pay facility fees on the long-term facility. As of
December 31, 2002, the Company had $111,000,000 outstanding under the long-term
revolving credit facility (interest rate of 3.03%; 5.77% after giving effect to
interest rate swaps). Letters of credit totaling $30,633,000 were issued under
the revolving credit facility at December 31, 2002. $358,367,000 was available
under the credit and swing line facility at December 31, 2002.

Borrowings under the credit facility are secured by pledges of stock in certain
significant subsidiaries and certain guarantees by significant subsidiaries. The
credit facility restricts the Company from paying cash dividends and requires
the Company to comply with other covenants, including the maintenance of
specific financial ratios.

On December 13, 2002, the Company completed the acquisition of BCcomponents
Holdings B.V. In connection with this acquisition, $105,000,000 in principal
amount of BCcomponents' mezzanine indebtedness and certain other securities of
BCcomponents were exchanged for $105,000,000 principal amount of floating rate
unsecured loan notes of the Company, due 2102. The notes bear interest at LIBOR
plus 1.5% through December 31, 2006 and at LIBOR thereafter. The interest rate
could be further reduced to 50% of LIBOR after December 31, 2010 if the price of
the Company's common stock trades above a specified target price, as provided in
the notes. The notes are subject to a put and call agreement under which the
holders may at any time put the notes to the Company in exchange for 6,176,471
shares of the Company's common stock in the aggregate, and the Company may call
the notes in exchange for cash or for shares of its common stock after 15 years
from the date of issuance.

On June 4, 2001, the Company completed a private placement of $550,000,000 face
amount Liquid Yield Option Notes (LYONs) due 2021. In connection with the sale
of the LYONs, the Company received net proceeds of $294,096,000 and used the
proceeds to pay down existing bank debt. Each LYON has a $1,000 face amount and
was offered at a price of $551.26 (55.126% of the principal amount at maturity).
The Company will not pay interest on the LYONs prior to maturity unless
contingent interest becomes payable.



F-33



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


6. Long-Term Debt (continued)

The issue price of each LYON represents a yield to maturity of 3.00%, excluding
any contingent interest. The LYONs are subordinated in right of payment to all
of the Company's existing and future senior indebtedness.

At any time on or before the maturity date, the LYONs are convertible into
Vishay Common Stock at a rate of 17.6686 shares of Common Stock per $1,000
principal amount at maturity. The conversion rate may be adjusted under certain
circumstances, but it will not be adjusted for accrued original issue discount.

The Company is required to pay contingent interest to the holders of the LYONs
during the six-month period commencing June 4, 2006 and during any six-month
period thereafter if the average market price of a LYON for a certain
measurement period immediately preceding the applicable six-month period equals
120% or more of the sum of the issue price and accrued original issue discount
for such LYON. The amount of contingent interest payable during any six-month
period will be the sum of any contingent interest payable in the first and
second three-month periods during such six-month period. During any three-month
period in which contingent interest becomes payable, the contingent interest
payable per LYON for such period will be equal to the greater of (1) 0.0625% of
the average market price of a LYON for the measurement period referred to above
or (2) the sum of all regular cash dividends paid by the Company per share on
its common stock during such three-month period multiplied by the number of
shares of common stock issuable upon conversion of a LYON at the then-applicable
conversion rate.

The holders of the LYONs may require the Company to repurchase all or a portion
of their LYONs on June 4, 2004, 2006, 2011, and 2016 at various prices set forth
in the notes. The Company may choose to pay the purchase price in cash, Common
Stock, or a combination of both. The Company may redeem for cash all or a
portion of the LYONs at any time on or after June 4, 2006 at the prices set
forth in the notes.

General Semiconductor, which was acquired by the Company on November 2, 2001,
had outstanding $172.5 million principal amount of 5.75% convertible
subordinated notes due December 15, 2006. The notes were recorded at their fair
value of $170.5 million as of the November 2, 2001 acquisition date. Interest on
the convertible notes is payable semiannually on June 15 and December 15 of each
year. As a consequence of the Company's acquisition of General Semiconductor,
the convertible notes became convertible into approximately 6.2 million shares
of the Company's Common Stock. The



F-34



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


6. Long-Term Debt (continued)

convertible notes are redeemable at the Company's option, in whole or in part,
at any time on or after December 15, 2002 at a premium of 103.286% of par value
declining annually to 100.821% at December 15, 2005 and thereafter.

Aggregate annual maturities of long-term debt, assuming that the Company is
required to repurchase the LYONs in 2004, are as follows: 2003 - $18,550,000;
2004 - $318,869,000; 2005 - $111,533,000; 2006 - $169,373,000; 2007 - $11,000;
and thereafter - $106,530,000.

At December 31, 2002, the Company had committed and uncommitted short-term
credit lines with various U.S. and foreign banks aggregating $77,803,000, of
which $59,642,000 was unused. The weighted average interest rate on short-term
borrowings outstanding as of December 31, 2002 and 2001 was 2.80% and 2.53%,
respectively.

Interest paid was $17,977,000, $15,685,000, and $29,930,000, for the years ended
December 31, 2002, 2001, and 2000, respectively.

7. Stockholders' Equity

The Company's Class B Common Stock carries ten votes per share while the Common
Stock carries one vote per share. Class B shares are transferable only to
certain permitted transferees while the Common Stock is freely transferable.
Class B shares are convertible on a one-for-one basis at any time into shares of
Common Stock.

The Company completed a public offering of its Common Stock on May 15, 2000,
selling 8,392,500 shares at a price of $49.00 (adjusted for the June 9, 2000
three-for-two stock split). The total net proceeds to the Company from the
offering, after deducting the underwriting discount and estimated expenses, were
approximately $395,449,000. These proceeds were used to repay a portion of the
debt outstanding under its long-term revolving credit facility.

In connection with the Company's acquisition of 65% of LPSC in July 1997, the
Company issued stock appreciation rights (SARs) to the Lite-On Group (former
owners of LPSC). The SARs represented the right to receive, in stock, the
increase in value on the equivalent of 3,200,000 shares of the Company's Common
Stock, above $11.68 per share. On January 24, 2000, the Company exercised its
right to call the SARs. Based on the call price of $26.43 per share and the
average closing price of Vishay shares for the



F-35


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


7. Stockholders' Equity (continued)

thirty days prior to January 24, 2000, the Company would have had to issue
2,294,000 shares of Common Stock to settle the SARs. In connection with the sale
of its 65% interest in LPSC to the Lite-On Group (see Note 2), the Lite-On Group
transferred its rights under the SARs to Vishay.

On November 2, 2001, the stockholders approved an increase in the authorized
capital stock of the Company. The total authorized Common Stock was increased
from 150,000,000 to 300,000,000 shares and the Class B Common Stock was
increased from 20,000,000 to 40,000,000 shares.

On August 10, 2000, the Board of Directors of the Company authorized the
repurchase of up to 5,000,000 shares of its Common Stock from time to time in
the open market. As of December 31, 2002, the Company had repurchased 248,500
shares for a total of $6,616,000.

Unearned compensation relating to Common Stock issued under employee stock plans
is being amortized over periods ranging from three to five years. At December
31, 2002, 305,126 shares were available for issuance under stock plans.

At December 31, 2002, the Company has reserved shares of Common Stock for future
issuance as follows:

Employee stock plan 305,126
Common stock options outstanding 9,231,000
Common stock options available to grant 1,036,000
Common stock warrants 8,823,529
Convertible unsecured notes, BCcomponents 6,176,471
Convertible subordinated notes, LYONs 9,717,730
Class B commmon stock 15,383,581
Convertible subordinated notes, General Semiconductor 6,191,166
----------
56,864,603
==========



F-36


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


8. Other Income (Expense)

Other income (expense) consists of the following:




Year ended December 31
2002 2001 2000
----------------------------------------
(In thousands)


Foreign exchange (losses) gains $ (777) $ 611 $ (7,305)
Loss on ineffective interest rate swap (115) (3,668) -
Interest income 7,952 15,092 9,652
Dividend income 100 - -
Equity in net income of affiliates - - 2,577
Gain on termination of interest rate swap
agreements - - 8,919
Gains on sale of subsidiaries - - 5,851
(Losses) gains on disposal of property and
equipment (296) 1,472 (2,320)
Other 1,800 (806) 1,530
----------------------------------------
$ 8,664 $ 12,701 $ 18,904
========================================



In connection with repayments of debt in 2000, the Company terminated
$200,000,000 notional amount of interest rate swap agreements (see Note 14) and
recognized pretax gains of $8,919,000.

During the year ended December 31, 2000, the Company sold its 65% interest in
LPSC and all of the assets of V-Tech Latino American LTDA. The sale of LPSC
resulted in a pretax gain of $8,401,000 and the sale of V-Tech resulted in a
pretax loss of $2,550,000 (see Note 2).



F-37


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


9. Other Accrued Expenses

Other accrued expenses consists of the following (in thousands):




2002 2001
--------------------------


Restructuring $ 95,127 $143,033
Returns and allowances 39,803 32,140
Loss on tantalum purchase commitment - current portion 25,334 -
Other 143,345 117,423
--------------------------
$303,609 $292,596
==========================



10. Other Comprehensive Income (Loss)

The cumulative balance of each component of other comprehensive income (loss)
and the income tax effects allocated to each component are as follows:




Tax
Beginning Before-Tax Benefit Net-of-Tax Ending
Balance Amount (Expense) Amount Balance
------------------------------------------------------------------------------------
(In thousands)


December 31, 2002
Pension liability adjustment $ (13,694) $ (35,562) $ 12,332 $ (23,230) $ (36,924)
Currency translation adjustment (116,072) 64,343 - 64,343 (51,729)
Loss on derivative financial
instruments (645) (2,291) 474 (1,817) (2,462)
-----------------------------------------------------------------------------------
$(130,411) $ 26,490 $ 12,806 $ 39,296 $ (91,115)
===================================================================================

December 31, 2001
Pension liability adjustment $ (5,137) $ (13,281) $ 4,724 $ (8,557) $ (13,694)
Currency translation adjustment (108,434) (7,638) - (7,638) (116,072)
Loss on derivative financial
instruments - (1,019) 374 (645) (645)
----------------------------------------------------------------------------------
$(113,571) $ (21,938) $ 5,098 $ (16,840) $(130,411)
==================================================================================

December 31, 2000
Pension liability adjustment $ (5,043) $ 1,258 $ (1,352) $ (94) $ (5,137)
Currency translation adjustment (75,966) (32,468) - (32,468) (108,434)
----------------------------------------------------------------------------------
$ (81,009) $ (31,210) $ (1,352) $ (32,562) $(113,571)
==================================================================================




F-38


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


11. Pensions and Other Postretirement Benefits

The Company maintains several defined benefit pension and nonpension
postretirement plans which cover substantially all full-time U.S. employees. The
U.S. pension plans of General Semiconductor are included beginning on November
2, 2001. The following table sets forth a reconciliation of the benefit
obligation, plan assets, and accrued benefit cost related to these plans:




Pension Benefits Other Benefits
----------------------------------------------------------------
2002 2001 2002 2001
----------------------------------------------------------------
(In thousands)

Change in benefit obligation:

Benefit obligation at beginning of year $ 193,273 $ 116,008 $ 20,286 $ 7,964
Service cost 3,433 3,092 279 240
Interest cost 13,598 9,023 1,465 678
Employee contributions 1,680 2,019 - -
Actuarial losses (gains) (1,158) (169) 1,400 325
Plan amendments - - (410) -
Benefits paid (16,090) (7,565) (1,530) (523)
Assumption change 12,299 - 509 -
Acquisition of General Semiconductor - 70,865 - 11,602
----------------------------------------------------------------
Benefit obligation at end of year $ 207,035 $ 193,273 $ 21,999 $ 20,286
================================================================

Change in plan assets:
Fair value of plan assets at beginning
of year $ 165,186 $ 102,918
Actual return on plan assets (11,224) (1,078)
Company contributions 4,226 5,113
Plan participants' contributions 1,680 2,019
Benefits paid (16,090) (7,565)
Acquisition of General Semiconductor - 63,779
------------------------------
Fair value of plan assets at end of year $ 143,778 $ 165,186
==============================

Funded status $ (63,257) $ (28,087) $ (21,999) $ (20,286)
Unrecognized net actuarial loss (gain) 60,957 26,812 1,237 (671)
Unrecognized transition obligation (asset) (101) (302) 1,934 2,128
Unamortized prior service cost - - 182 639
Additional minimum liability (48,682) (13,638) - -
----------------------------------------------------------------
Net amount recognized $ (51,083) $ (15,215) $ (18,646) $ (18,190)
================================================================




F-39


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


11. Pensions and Other Postretirement Benefits (continued)




Pension Benefits Other Benefits
---------------------------------------------------------------
2002 2001 2002 2001
---------------------------------------------------------------
(In thousands)

Amounts recognized in the consolidated balance
sheets consist of:


Accrued benefit liability $(82,726) $(24,079) $(18,646) $(18,190)
Accumulated other comprehensive loss 31,643 8,864 - -
-------------------------------------------------------------------
Net amount recognized $(51,083) $(15,215) $(18,646) $(18,190)
===================================================================

Weighted-average assumptions
as of December 31:
Discount rate 6.75% 7.25% 6.75% 7.25%
Expected return on plan assets 8.50%-8.75% 8.50%-9.50%
Rate of compensation increase 4.50%-6.50% 4.50%-6.50%



Pension Benefits Other Benefits
----------------------------------------------------------------------------------
2002 2001 2000 2002 2001 2000
----------------------------------------------------------------------------------
(In thousands)

Components of net periodic benefit cost:


Annual service cost $ 5,424 $ 5,388 $ 4,595 $ 279 $ 240 $ 225
Less expected employee
contributions 1,991 2,296 2,067 - - -
----------------------------------------------------------------------------------
Net service cost 3,433 3,092 2,528 279 240 225
Interest cost 13,598 9,023 7,858 1,466 678 545
Expected return on plan
assets (14,227) (10,048) (8,703) - - -
Amortization of prior
service cost - 6 67 47 93 93
Amortization of transition
obligation (201) 311 110 194 194 194
Amortization of (gains)
losses 1,474 514 556 - - (17)
----------------------------------------------------------------------------------
Net periodic benefit cost $ 4,077 $ 2,898 $ 2,416 $ 1,986 $ 1,205 $ 1,040
==================================================================================




F-40


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


11. Pensions and Other Postretirement Benefits (continued)

The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for the pension plans with accumulated and projected benefit
obligations in excess of plan assets were $207,035,000, $194,760,000, and
$143,778,000, respectively, as of December 31, 2002 and $121,472,000,
$107,553,000, and $99,210,000, respectively, as of December 31, 2001.

The Company maintains two unfunded nonpension postretirement plans funded as
costs are incurred. One plan is contributory, with employee contributions
adjusted for general inflation or inflation in costs under the plan. The plan
was amended in 1993 to cap employer contributions at 1993 levels. The second
plan covers all full-time U.S. General Semiconductor employees not covered by a
collective bargaining agreement who meet defined age and service requirements.
This plan is the primary provider of benefits for retirees up to age 65, after
which Medicare becomes the primary provider. The impact of a
one-percentage-point change in assumed health care cost trend rates on the net
periodic benefit cost and postretirement benefit obligation is immaterial.

Many of the Company's U.S. employees are eligible to participate in 401(k)
savings plans, some of which provide for Company matching under various
formulas. The Company's matching expense for the plans was $2,990,000,
$3,182,000, and $3,161,000 for the years ended December 31, 2002, 2001, and
2000, respectively.

The Company provides pension and similar benefits to employees of certain
foreign subsidiaries consistent with local practices. Certain foreign
subsidiaries of the Company have defined benefit pension plans. The foreign
pension plans of General Semiconductor are included as of November 2, 2001. The
foreign pension plans of BCcomponents are included as of December 13, 2002. The
following table sets forth a reconciliation of the benefit obligation, plan
assets, and accrued benefit cost related to the foreign defined benefit plans:



F-41


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


11. Pensions and Other Postretirement Benefits (continued)




2002 2001
-------------------------------
(In thousands)

Change in benefit obligation:

Benefit obligation at beginning of year $ 93,397 $ 90,548
Service cost 525 391
Interest cost 5,630 5,301
Actuarial gains (1,572) (26)
Benefits paid (4,869) (4,845)
Foreign currency translation 13,055 (3,845)
Curtailment gains (1,336) -
Acquisitions 14,343 5,873
------------------------------
Benefit obligation at end of year $ 119,173 $ 93,397
==============================

Change in plan assets:
Fair value of plan assets at beginning of year $ 13,137 $ 13,417
Actual return on plan assets (894) 1,019
Company contributions 2,449 1,947
Benefits paid (2,454) (2,440)
Foreign currency translation 2,407 (806)
------------------------------
Fair value of plan assets at end of year $ 14,645 $ 13,137
==============================

Funded status $(104,528) $ (80,260)
Unrecognized net actuarial (gains) losses (636) 1,560
Unrecognized transition asset 21 18
Unamortized prior service cost (3) (6)
------------------------------
Net amount recognized $(105,146) $ (78,688)
==============================




F-42


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


11. Pensions and Other Postretirement Benefits (continued)




2002 2001
------------------------------
(In thousands)

Amounts recognized in the consolidated balance
sheets consist of:
Accrued benefit liability $ (110,427) $ (83,518)
Accumulated other comprehensive loss 5,281 4,830
------------------------------
Net amount recognized $ (105,146) $ (78,688)
==============================

Weighted-average assumptions as of December 31:
Discount rate 6.00% - 6.25% 6.50%
Rate of compensation increase 2.60% - 3.00% 3.00%



2002 2001 2000
-------------------------------------------
(In thousands)

Components of net periodic benefit cost:


Service cost $ 525 $ 391 $ 440
Interest cost 5,630 5,301 5,755
Expected return on plan assets (489) (444) (440)
Amortization of prior service cost - 36 45
Amortization of transition asset (3) (3) (4)
Curtailment gains (1,336) - -
Amortization of (gains) losses (94) 97 151
------------------------------------------
Net periodic benefit cost $ 4,233 $ 5,378 $ 5,947
==========================================



The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for the foreign pension plans with accumulated benefit
obligations and projected benefit obligations in excess of plan assets were
$119,173,000, $118,646,000, and $14,645,000, respectively, as of December 31,
2002 and $81,463,000, $81,646,000, and $13,137,000, respectively, as of December
31, 2001.



F-43



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


12. Stock Options

The Company has three stock option programs. Under the 1995 Stock Option
Program, certain key executives of the Company were granted options on March 19,
1995, to purchase 2,283,000 shares of the Company's Common Stock. The options
were fully vested on the date of grant and expired March 1, 2000, with one-third
exercisable at $12.21, one-third exercisable at $15.36, and one-third
exercisable at $21.94. As of December 31, 2000, options to purchase 2,010,000
shares had been exercised under this plan and the remaining options had been
canceled.

Under the 1997 Stock Option Program, certain executive officers, key employees,
and consultants of the Company were granted options on May 21, 1998, to purchase
2,687,000 shares of the Company's Common Stock. The options were fully vested on
the date of grant and expire June 1, 2008, with one-third exercisable at $10.89,
one-third exercisable at $12.53, and one-third exercisable at $13.61. As of
December 31, 2002, options to purchase 528,000 shares have been exercised under
this plan.

Under the 1998 Stock Option Program, certain executive officers and key
employees were granted options, as summarized in the following table:




# of Exercise
Date of Grant Options Price Vesting Expiration
- -------------------------------------------------------------------------------------------------------------


October 6, 1998 1,598,000 $ 5.60 Evenly over 6 years March 16, 2008
October 8, 1999 1,334,000 15.33 Evenly over 6 years October 8, 2009
August 4, 2000 50,000 30.00 Evenly over 5 years, August 4, 2010
beginning August 4, 2003
October 12, 2000 1,114,000 25.13 Evenly over 6 years October 12, 2010
October 1, 2001 through 15,000 $14.40 - Evenly over 6 years October 1, 2011
August 5, 2002 $25.07 through August 5, 2012



On May 18, 2000, the stockholders of the Company approved an increase in the
number of shares available for grant under Vishay's 1998 Stock Option Program.
As a result, the number of shares available for grant under this program
increased from 2,953,500 to 4,453,500. As of December 31, 2002, options to
purchase 362,000 shares have been exercised under this plan.



F-44



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


12. Stock Options (continued)

On November 2, 2001, Vishay acquired General Semiconductor and General
Semiconductor became a wholly owned subsidiary of the Company. As a result of
the acquisition, each outstanding option to acquire General Semiconductor common
stock became exercisable for shares of Vishay Common Stock. Based on the
conversion ratio in the acquisition of 0.563 of a Vishay share for each General
Semiconductor share, the former General Semiconductor options become exercisable
in the aggregate for 4,282,000 shares of Vishay Common Stock. All such options
were immediately vested and exercisable as a result of the merger but the terms
of the options otherwise remained unchanged. As of December 31, 2002, options to
purchase 190,000 shares have been exercised under this plan.

The following table summarizes the Company's stock option activity (options in
thousands):




2002 2001 2000
--------------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Number of Exercise Number of Exercise Number of Exercise
Options Price Options Price Options Price
--------------------------------------------------------------------------------------


Outstanding at beginning
of year 9,569 $ 15.97 5,646 $ 14.29 7,493 $ 12.67
Granted 15 17.75 - - 1,164 25.34
Exercised (261) 12.12 (86) 9.99 (2,656) 15.08
Canceled (92) 17.14 (273) 17.82 (355) 10.41
Acquisition of General
Semiconductor - - 4,282 18.10 - -
--------- -------- --------
Outstanding at end of year 9,231 16.07 9,569 15.97 5,646 14.29
========= ======== ========
Exercisable at end of year 7,626 15.79 7,358 15.74 2,651 11.96
========= ======== ========

Available for future grants 1,036 958 760
========= ======== ========



F-45



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


12. Stock Options (continued)

The following table summarizes information concerning stock options outstanding
and exercisable at December 31, 2002 (options in thousands):




Options Outstanding
--------------------------------------------------
Options Exercisable
--------------------------------
Weighted Average
Range of Number of Remaining Weighted Average Number of Weighted Average
Exercise Prices Options Contractual Life Exercise Price Options Exercise Price
- -----------------------------------------------------------------------------------------------------------


$2.64 3 1.57 $ 2.64 3 $ 2.64
$5.60 962 5.74 5.60 584 5.60
$10.89 - $12.53 1,289 5.39 11.76 1,289 11.76
$12.54 - $13.61 1,283 5.35 13.28 1,283 13.28
$14.32 - $14.99 62 2.48 14.46 55 14.46
$15.33 1,033 6.74 15.33 510 15.33
$15.43 - $16.41 1,369 7.59 15.97 1,369 15.97
$16.52 - $20.86 1,366 5.88 18.95 1,361 18.95
$21.43 - $25.07 595 3.23 22.44 592 22.42
$25.13 - $34.52 1,269 7.48 25.93 580 26.47
---------- --------
Total 9,231 $ 16.07 7,626 $ 15.79
========== ========


13. Commitments and Contingencies

Total rental expense under operating leases was $27,652,000, $22,994,000, and
$21,431,000 for the years ended December 31, 2002, 2001, and 2000, respectively.

Future minimum lease payments for operating leases with initial or remaining
noncancelable lease terms in excess of one year are as follows: 2003 -
$21,978,000; 2004 - $15,419,000; 2005 - $12,675,000; 2006 - $11,390,000; 2007 -
$10,773,000 and thereafter - $4,739,000.

Environmental Matters

The Company is subject to various federal, state, local and foreign laws and
regulations governing environmental matters, including the use, discharge and
disposal of hazardous materials. The Company's manufacturing facilities are
believed to be in substantial compliance with current laws and regulations.
Complying with current laws and regulations has not had a material adverse
effect on the Company's financial condition.



F-46


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


13. Commitments and Contingencies (continued)

Environmental Matters (continued)

As part of the acquisition of General Semiconductor by Vishay on November 2,
2001, the Company assumed ongoing environmental matters. As part of the
acquisition of BCcomponents on December 13, 2002, the Company has recorded
environmental liabilities of $7,600,000.

The Company has engaged independent consultants to assist management in
evaluating potential liabilities related to environmental matters. Management
assesses the input from these independent consultants along with other
information known to the Company in its effort to continually monitor these
potential liabilities. Management assesses its environmental exposure on a
site-by-site basis, including those sites where the Company has been named as a
"potentially responsible party." Such assessments include the Company's share of
remediation costs, information known to the Company concerning the size of the
hazardous waste sites, their years of operation and the number of past users and
their financial viability. The Company has a reserve of $22,405,000 recorded at
December 31, 2002 for environmental matters relating to General Semiconductor.
While the ultimate outcome of these matters cannot be determined, management
does not believe that the final disposition of these matters will have a
material adverse effect on the Company's financial position, results of
operations, or cash flows beyond the amounts previously provided for in the
financial statements.

The Company's present and past facilities have been in operation for many years,
and over that time in the course of those operations, such facilities have used
substances which are or might be considered hazardous, and the Company has
generated and disposed of wastes which are or might be considered hazardous.
Therefore, it is possible that additional environmental issues may arise in the
future, which the Company cannot now predict.

Litigation

In February and March 2001, several purported class-action complaints were filed
in the Delaware Court of Chancery and the California Superior Court against the
Company, Siliconix, and the directors of Siliconix in connection with a proposal
by the Company in February 2001 to purchase all issued and outstanding shares of
Siliconix that the Company did not already own. The class actions alleged that
the Company's proposed offer was unfair and a breach of fiduciary duty. One of
the Delaware class actions also



F-47


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


13. Commitments and Contingencies (continued)

Litigation (continued)

alleged that the Company had usurped Siliconix inventory and patents,
appropriated Siliconix's separate corporate identity, and obtained a
below-market loan from Siliconix. The actions sought injunctive relief, damages
and other relief. In June 2001, the Delaware Chancery Court denied a preliminary
injunction motion seeking to enjoin the Company's tender offer, which was
commenced in May 2001 but not successfully completed. Subsequently, the Company
and Siliconix filed motions to dismiss the actions in Delaware and for summary
judgment. The actions in California were stayed. In the fourth quarter of 2002,
based largely on the June 2001 Delaware Court of Chancery ruling, the parties
agreed to dismiss the case without prejudice.

The Company is a party to various claims and lawsuits arising in the normal
course of business . The Company is of the opinion that these litigations or
claims will not have a material negative effect on its consolidated financial
position, results of operations, or cash flows.

14. Financial Instruments

The Company uses financial instruments in the normal course of its business,
including derivative financial instruments, for purposes other than trading.
These financial instruments include debt and interest rate swap agreements. The
notional or contractual amounts of these commitments and other financial
instruments are discussed below.

Concentration of Credit Risk

Financial instruments with potential credit risk consist principally of cash and
cash equivalents and accounts receivable. The Company maintains cash and cash
equivalents with various major financial institutions. 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. At December 31, 2002 and 2001, the Company had no significant
concentrations of credit risk.



F-48


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


14. Financial Instruments (continued)

Interest Rate Swap Agreements

In August 1998, the Company entered into six interest rate swap agreements,
maturing in 2003, with a total notional amount of $300,000,000 to manage
interest rate risk related to its multicurrency revolving line of credit. These
interest rate swap agreements required the Company to make payments to the
counterparties at the fixed rate stated in the agreements, and in return to
receive payments from the counterparties at variable rates. During fiscal year
2000, the Company terminated $200,000,000 notional amount of interest rate swap
agreements and recognized a pretax gain of $8,919,000. At December 31, 2002, the
Company had outstanding one interest rate swap agreement with a notional amount
of $100,000,000. At December 31, 2002, 2001, and 2000, the Company paid a
weighted average fixed rate of 5.77%, respectively, and received a weighted
average variable rate of 1.40%, 1.93%, and 6.66%, respectively. The fair value
of the interest rate swap agreements, based on current market rates,
approximated a net payable of $3,309,000 and $4,686,000 at December 31, 2002 and
2001, respectively. For the years ended December 31, 2002 and 2001, the Company
recorded a pretax loss of $115,000 and $3,668,000, respectively, relating to an
ineffective hedge for a portion of time relating to an interest rate swap
agreement (see Note 8).

Cash and Cash Equivalents, Notes Payable, and Long-Term Debt

The carrying amounts of cash and cash equivalents reported in the consolidated
balance sheets approximate their fair values. The fair value of the long-term
debt is $723,429,000 as compared to its carrying value of $724,866,000. The fair
value of long-term debt was estimated based on trading prices and market prices
of debt with similar terms and features.

15. Current Vulnerability Due to Certain Concentrations

Customer Concentrations

A material portion of the Company's revenues are derived from the worldwide
communications and computer markets. These markets have historically experienced
wide variations in demand for end products. If demand for these end products
should continue to decrease , the producers thereof could reduce their purchases
of the Company's products, which could have a material adverse effect on the
Company's results of operations and financial position.



F-49


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


15. Current Vulnerability Due to Certain Concentrations (continued)

Sources of Supply

Although most materials incorporated in the Company's products are available
from a number of sources, certain materials (particularly tantalum and
palladium) are available only from a relatively limited number of suppliers.

Many of Vishay's products require the use of raw materials that are produced in
only a limited number of regions around the world or are available from only a
limited number of suppliers. Vishay's results of operations may be materially
and adversely affected if Vishay has difficulty obtaining these raw materials,
the quality of available raw materials deteriorates or there are significant
price increases for these raw materials. For example, the prices for tantalum
and palladium, two raw materials that Vishay uses in its capacitors, are subject
to fluctuation. For periods in which the prices of these raw materials are
rising, Vishay may be unable to pass on the increased cost to Vishay's
customers, which would result in decreased margins for the products in which
they are used. For periods in which the prices are declining, Vishay may be
required to write down its inventory carrying cost of these raw materials which,
depending on the extent of the difference between market price and its carrying
cost, could have a material adverse effect on Vishay's net earnings.

Vishay is a major consumer of the world's annual production of tantalum.
Tantalum, a metal purchased in powder or wire form, is the principal material
used in the manufacture of tantalum capacitors. There are currently three major
suppliers that process tantalum ore into capacitor grade tantalum powder. Due to
the strong demand for its tantalum capacitors and difficulty in obtaining
sufficient quantities of tantalum powder from its suppliers, Vishay stockpiled
tantalum ore in 2000 and early 2001. During 2001, Vishay and its competitors
experienced a significant decline in the tantalum capacitor business. Vishay's
usage of tantalum declined from 602,585 pounds in 2000 to 248,640 pounds in 2001
and 119,900 pounds in 2002. The market prices for tantalum also decreased
significantly during 2002. As a result, Vishay recorded, in costs of products
sold, writedowns of $25,700,000 and $52,000,000, respectively, on tantalum
inventories during the years ended December 31, 2002 and 2001, respectively. The
net book value of tantalum inventories is $49,609,000 and $49,337,000 at
December 31, 2002 and 2001, respectively. The Company also recorded a loss on
future purchase commitments of $106,000,000 for the year ended December 31,
2002. Vishay's purchase commitments were entered into at a time when market
demand for tantalum capacitors was high and



F-50


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


15. Current Vulnerability Due to Certain Concentrations (continued)

Sources of Supply (continued)

tantalum powder was in short supply. If the downward pricing trend were to
continue, the Company could again be required to write down the carrying value
of its tantalum inventory and record additional losses on its long-term purchase
commitments.

Under the terms of these future purchase commitments, the Company's purchase
commitments are approximately $100,300,000 for 2003, $103,800,000 for 2004,
$116,600,000 for 2005, and $60,100,000 for 2006. If certain conditions of the
contract are not met, the commitment could increase to $145,900,000 for 2003,
$147,600,000 for 2004, $149,300,000 for 2005, and $81,300,000 for 2006. The
Company purchased $53,280,000, $23,395,000, and $15,495,000 under these
contracts for the years ended December 31, 2002, 2001, and 2000, respectively.

Palladium, a metal used to produce multi-layer ceramic capacitors, is currently
found primarily in South Africa and Russia. Palladium is a commodity product
that is subject to price volatility. The price of palladium fluctuated in the
range of approximately $222 to $1,090 per troy ounce during the three years
ended December 31, 2002, and as of December 31, 2002, the price of palladium was
$236 per troy ounce. During the years ended December 31, 2002 and 2001,
respectively, the Company recorded in costs of products sold writedowns of
$1,700,000 and $18,000,000, respectively, on palladium inventories. The net book
value of palladium inventories is $5,644,000 and $12,260,000 at December 31,
2002 and 2001, respectively.

From time to time there have been short-term market shortages of raw material
utilized by Vishay. While these shortages have not historically adversely
affected Vishay's ability to increase production of products containing tantalum
and palladium, they have historically resulted in higher raw material cost for
Vishay. Vishay cannot assure that any of these market shortages in the future
would not adversely affect Vishay's ability to increase production, particularly
during periods of growing demand for Vishay's products.

Geographic Concentration

To address the increasing demand for its products and to lower its costs, the
Company has expanded, and plans to continue to expand, its manufacturing
operations in Israel in order to take advantage of that country's lower wage
rates, highly skilled labor force,




F-51


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


15. Current Vulnerability Due to Certain Concentrations (continued)

Geographic Concentration (continued)

government-sponsored grants, and various tax abatement programs. Israeli
incentive programs have contributed substantially to the growth and
profitability of the Company. The Company might be materially and adversely
affected if these incentive programs were no longer available to the Company or
if events were to occur in the Middle East that materially interfered with the
Company's operations in Israel.

16. Business Segment and Geographic Area Data

Vishay designs, manufactures, and markets electronic components that cover a
wide range of products and technologies. The Company has two reportable
segments: Passive Electronic Components (Passives) consisting principally of
fixed resistors, solid tantalum surface mount chip capacitors, solid tantalum
leaded capacitors, wet/foil tantalum capacitors, multi-layer ceramic chip
capacitors, film capacitors and inductors, and Active Electronic Components
(Actives) consisting principally of diodes, transistors, power MOSFETS, power
conversion, motor control integrated circuits, optoelectronic components and
IRDCs. The Company evaluates business segment performance on operating income,
exclusive of restructuring charges, amortization of goodwill and unusual and
non-recurring items.

The Company evaluates performance and allocates resources based on several
factors, of which the primary financial measure is business segment operating
income excluding amortization of intangibles and special charges. The accounting
policies of the business segments are the same as those described in the summary
of significant accounting policies (see Note 1). The operating results of
Passives reflect the acquisitions of Celtron as of October 1, 2002, BLH/Nobel as
of August 1, 2002, Tedea-Huntleigh BV as of June 1, 2002, and Sensortronics as
of January 31, 2002. The operating results of Actives reflect the acquisitions
of Infineon Malaysia as of December 31, 2001, General Semiconductor as of
November 2, 2001, and Infineon U.S. as of July 27, 2001, and include LPSC from
July 1, 1997 through its divestiture in 2000. Business segment assets are the
owned or allocated assets used by each business.

The corporate component of operating income represents corporate selling,
general, and administrative expenses. Corporate assets include corporate cash,
property, plant, and equipment, and certain other assets.

During the year 2000, one North American distributor accounted for 14% of total
net sales. During the years 2002 and 2001, no individual customer accounted for
more than 10% of net sales.



F-52


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


16. Business Segment and Geographic Area Data (continued)




2002 2001 2000
----------------------------------------------------------
(In thousands)

Business segment information
Net sales:
Passives $ 767,246 $ 1,010,634 $ 1,627,860
Actives 1,055,567 644,712 837,206
----------------------------------------------------------
$ 1,822,813 $ 1,655,346 $ 2,465,066
==========================================================

Operating income (loss):
Passives $ (61,317) $ 60,137 $ 547,156
Actives 139,140 65,181 204,640
Corporate (20,801) (21,970) (43,829)
Restructuring expense (30,970) (61,908) -
Purchased research and development - (16,000) -
Loss on long-term purchase commitments (106,000) - -
Amortization of goodwill - (11,190) (11,469)
----------------------------------------------------------
$ (79,948) $ 14,250 $ 696,498
==========================================================

Restructuring expense:
Passives $ 30,049 $ 57,498 $ -
Actives 921 4,410 -
----------------------------------------------------------
$ 30,970 $ 61,908 $ -
==========================================================

Depreciation expense:
Passives $ 80,084 $ 83,735 $ 73,803
Actives 87,609 61,238 52,250
Corporate 4,481 4,252 232
----------------------------------------------------------
$ 172,174 $ 149,225 $ 126,285
==========================================================



F-53


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


16. Business Segment and Geographic Area Data (continued)




2002 2001 2000
--------------------------------------------------------------
(In thousands)
Interest expense:

Passives $ 963 $ 680 $ 60
Actives 10,545 1,988 1,389
Corporate 17,253 14,180 23,728
--------------------------------------------------------------
$ 28,761 $ 16,848 $ 25,177
==============================================================

Income tax expense (benefit):
Passives $ (33,674) $ (2,912) $ 106,353
Actives 21,286 11,862 51,469
Corporate (4,512) (3,255) (9,636)
---------------------------------------------------------------
$ (16,900) $ 5,695 $ 148,186
==============================================================

Total assets:
Passives $ 2,125,443 $ 1,876,282 $ 1,931,610
Actives 2,046,944 1,980,841 809,360
Corporate 142,772 94,400 42,688
--------------------------------------------------------------
$ 4,315,159 $ 3,951,523 $ 2,783,658
==============================================================

Capital expenditures:
Passives $ 45,105 $ 91,028 $ 131,318
Actives 62,933 68,463 95,343
Corporate 2,036 3,002 3,120
--------------------------------------------------------------
$ 110,074 $ 162,493 $ 229,781
==============================================================




F-54



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


16. Business Segment and Geographic Area Data (continued)

The following geographic area data include net sales based on revenues generated
by subsidiaries located within that geographic area and property, plant, and
equipment based on physical location:




2002 2001 2000
------------------------------------------------------------
(In thousands)
Geographic area information

Net sales:
United States $ 482,154 $ 638,326 $1,034,985
Germany 382,932 452,839 678,398
Asia Pacific 542,859 315,550 279,645
France 69,635 85,046 85,686
Israel 75,238 32,646 296,704
Other 269,995 130,939 89,648
----------------------------------------------------------
$1,822,813 $1,655,346 $2,465,066
==========================================================

Property, plant, and equipment - net:
United States $ 307,783 $ 345,602 $ 355,291
Germany 154,288 116,435 116,910
Israel 328,315 351,375 317,840
Asia Pacific 253,937 221,819 77,337
France 37,687 33,745 24,272
Other 192,840 98,557 81,904
----------------------------------------------------------
$1,274,850 $1,167,533 $ 973,554
==========================================================


17. Earnings (Loss) per Share

Basic (loss) earnings per share is computed using the weighted average number of
common shares outstanding during the periods presented. Diluted (loss) earnings
per share is computed using the weighted average number of common shares
outstanding adjusted to include the potentially dilutive effect of stock options
granted under the Company's 1995, 1997, and 1998 stock option plans (see Note
12), stock appreciation rights issued in connection with the LPSC acquisition
(see Note 2), and other potentially dilutive securities.



F-55



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


17. Earnings (Loss) per Share (continued)

The following table sets forth the computation of basic and diluted earnings
(loss) per share (in thousands, except per share amounts):




Year ended December 31
2002 2001 2000
-------------------------------------------------------

Numerator


Numerator for basic (loss) earnings per share -
net (loss) income $ (92,614) $ 513 $ 517,864
=====================================================

Denominator
Denominator for basic (loss) earnings per share
- weighted average shares 159,413 141,171 135,295

Effect of dilutive securities:
Employee stock options - 1,201 1,831
Stock appreciation rights - - 144
Other - 142 193
-----------------------------------------------------
Dilutive potential common shares - 1,343 2,168
-----------------------------------------------------

Denominator for diluted earnings per share -
adjusted weighted average shares 159,413 142,514 137,463
=====================================================

Basic (loss) earnings per share $ (0.58) $ 0.00 $ 3.83
=====================================================

Diluted (loss) earnings per share $ (0.58) $ 0.00 $ 3.77
=====================================================




F-56



Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


17. Earnings (Loss) per Share (continued)

For the year ended December 31, 2002, options to purchase 9,231,000 shares of
common stock at prices ranging from $2.64 to $34.52, for the year ended
December 31, 2001, options to purchase 1,164,000 shares of common stock
at prices ranging from $25.13 to $30.00 per share, and for the year ended
December 31, 2000, options to purchase 1,114,000 shares of common stock at
$25.13 per share were not included in the computation of diluted earnings per
share because their inclusion would have been anti-dilutive. For the year ended
December 31, 2002, warrants to purchase 8,823,529 shares were not included in
the computation of diluted earnings per share because the warrants' strike
prices were greater than the average market price on the common shares.
Additionally, for the years ended December 31, 2002 and 2001, convertible notes,
convertible into approximately 22,085,000 and 15,908,896 shares, respectively,
have not been included in the calculation of diluted earnings per share because
their effect would be antidilutive.

18. Related Party Transactions

On December 12, 2002, the Company's Board of Directors passed resolutions to
terminate the stock purchase programs for corporate officers and key employees
(together the "Plan") and to offer to all Plan participants the opportunity to
surrender to the Company the shares of Vishay common stock purchased with their
Plan loans in satisfaction of such loans and all accrued interest thereon. Under
the resolutions, the Company agreed that it would compensate the Plan
participants for any income tax that the participants are required to recognize
as a result of the surrender. Two directors of the Company are among the
participants in the Plan. For all Plan participants, the current market value of
the Vishay common stock purchased with Plan loans is significantly below the
outstanding balances of the loans. The Company recorded a writedown for the
loans and accrued interest, and an accrual for compensation expense attributable
to taxes owing by Plan participants on surrender, totaling $2,591,000 as of
December 31, 2002. This amount is recorded in selling, general, and
administrative expense.


F-57


Vishay Intertechnology, Inc.

Notes to Consolidated Financial Statements (continued)


19. Summary of Quarterly Financial Information (Unaudited)



Quarterly financial information for the years ended December 31, 2002 and 2001 is as follows (in thousands, except per share
amounts):


First Quarter Second Quarter Third Quarter
2002(3)(11) 2001(6) 2002(3)(12) 2001(7) 2002(3)(4)(13) 2001(1)(8)
-------------------------------------------------------------------------------------


Net sales $ 434,140 $ 558,465 $ 457,877 $ 383,437 $ 471,419 $ 332,293
Gross profit 86,937 198,854 107,565 101,051 107,227 29,388
Net earnings (loss) 2,420 90,126 15,617 3,126 13,114 (39,152)

Basic earnings (loss) per share $ 0.02 $ 0.65 $ 0.10 $ 0.02 $ 0.08 $ (0.28)
Diluted earnings (loss) per share $ 0.02 $ 0.65 $ 0.10 $ 0.02 $ 0.08 $ (0.28)



Fourth Quarter Total Year
2002(3)(4)(5)(14) 2001(1)(2)(9) 2002(3)(4)(5)(15) 2001(1)(2)(10)
------------------------------------------------------------------------------------


Net sales $ 459,377 $ 381,151 $ 1,822,813 $ 1,655,346
Gross profit 66,544 52,226 368,273 381,519
Net earnings (loss) (123,765) (53,587) (92,614) 513

Basic earnings (loss) per share $ (0.78) $ (0.35) $ (0.58) $ 0.00
Diluted earnings (loss) per share $ (0.78) $ (0.35) $ (0.58) $ 0.00


(1) Includes the results of Infineon U.S. from July 27, 2001.
(2) Includes the results of General Semiconductor from November 2, 2001 and Mallory from November 7, 2001.
(3) Includes the results of Sensortronics from January 31, 2002.
(4) Includes the results of Tedea-Huntleigh from July 1, 2002 and BLH and Nobel from August 1, 2002.
(5) Includes the results of Celtron from October 1, 2002.
(6) Includes restructuring charges of $5,971,000 and writedown of tantalum inventory of $10,000,000.
(7) Includes restructuring charges of $29,305,000 and writedown of tantalum inventory of $10,000,000.
(8) Includes restructuring charges of $11,802,000, and writedowns of tantalum and palladium inventories of $17,000,000 and
$18,000,000, respectively.
(9) Includes restructuring charges of $14,830,000, writedown of tantalum inventory of $15,000,000, and purchased research and
development costs of $16,000,000.
(10) Includes restructuring charges of $61,908,000, writedowns of tantalum and palladium inventories of $52,000,000 and $18,000,000,
respectively, and purchased research and development costs of $16,000,000.
(11) Includes restructuring charges of $3,024,000.
(12) Includes restructuring charges of $1,907,000.
(13) Includes restructuring charges of $2,567,000 and write-down of palladium inventory of $600,000.
(14) Includes restructuring charges of $23,472,000, losses of future purchase commitments of $106,000,000 and write-downs of
tantalum and palladium inventories of $25,700,000 and $1,100,000, respectively.
(15) Includes restructuring charges of $30,970,000, losses of future purchase commitments of $106,000,000 and write-downs of
tantalum and palladium inventories of $25,700,000 and $1,700,000, respectively.




F-58





EXHIBIT INDEX

Exhibit
No. Description
------- -----------

2.1 Agreement and Plan of Merger, dated as of July 31, 2001, by and
among Vishay Intertechnology, Inc., Vishay Acquisition Corp., and
General Semiconductor, Inc. Incorporated by reference to Annex A to
the Joint Proxy Statement/Prospectus forming a part of the
Registration Statement on Form S-4 (No. 333-69004) filed on
September 6, 2001.

2.2 Share Sale and Purchase Agreement between Phoenix Acquisition
Company S.ar.l; Other Investors (as defined); Mezzanine Lenders (as
defined); Vishay Intertechnology, Inc.; Vishay Europe Gmbh; and
BCcomponents International B.V., dated as of November 10, 2002.
Incorporated by reference to Exhibit 2.1 to Form 8-K File filed
December 23, 2002.

2.3 Amendment to the Share Sale and Purchase Agreement between Phoenix
Acquisition Company S.ar.l; Other Investors (as defined); Mezzanine
Lenders (as defined); Vishay Intertechnology, Inc.; Vishay Europe
Gmbh; and BCcomponents International B.V., dated as of December 4,
2002. Incorporated by reference to Exhibit 2.2 to Form 8-K File
filed December 23, 2002.

3.1 Composite Amended and Restated Certificate of Incorporation of the
Company dated August 3, 1995. Incorporated by reference to Exhibit
3.1 to the Company's quarterly report on Form 10-Q for the quarter
ended June 30, 1995 (the "1995 Form 10-Q"). Certificate of Amendment
of Composite Amended and Restated Certificate of Incorporation of
the Company. Incorporated by reference to Exhibit 3.1 to Form 10-Q
for the quarter ended June 30, 1997 (the "1997 Form 10-Q").
Certificate of Amendment of the Amended and Restated Certificate of
Incorporation of the Company. Incorporated by reference to Exhibit
3.1 to Form 8-K File filed November 13, 2001.

3.2 Amended and Restated Bylaws of Registrant. Incorporated by reference
to Exhibit 3.1 the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 2001.

4.1 Indenture dated as of June 4, 2001 between Vishay Intertechnology,
Inc. and Bank of New York as Trustee. Incorporated by reference to
Exhibit 4.1 to Current Report of Registrant on Form 8-K filed on
June 18, 2001 under the Securities Exchange Act of 1934 except that
clause (x) of Section 5 thereof is corrected to read "(x) 0.0625% of
the average LYON Market Price for the Five Day Period with respect
to such Contingent Interest Period and".

4.2 Indenture dated as of December 14, 1999 between General
Semiconductor, Inc. and The Bank of New York as Trustee.
Incorporated by reference to Exhibit 4.5 to the Registration
Statement on Form S-3 (No. 333-94513) filed by General
Semiconductor, Inc. on January 12, 2000.

4.3 First Supplemental Indenture dated as of November 2, 2001 among
General Semiconductor, Inc., Vishay Intertechnology, Inc., and The
Bank of New


1



York as Trustee to Indenture dated as of December 14, 1999.
Incorporated by reference to Exhibit 4.3 to the Company's annual
report on Form 10-K for the year ended December 31, 2001.

4.4 Second Supplemental Indenture dated as of January 8, 2002 among
General Semiconductor, Inc., Vishay Intertechnology, Inc., and The
Bank of New York as Trustee to Indenture dated as of December 14,
1999. Incorporated by reference to Exhibit 4.3 to the Company's
annual report on Form 10-K for the year ended December 31, 2001.

10.1 Performance-Based Compensation Plan for Chief Executive Officer of
Registrant. Incorporated by reference to Exhibit 10.1 to Form 10-K
for fiscal year ended December 31, 1993.

10.2 Vishay Intertechnology, Inc. Amended and Restated Long Term
Revolving Credit Agreement, dated as of June 1, 1999, by and among
Vishay and the Permitted Borrowers (as defined therein), the Lenders
(as defined therein), and Comerica Bank, as administrative agent.
Incorporated by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-3 (No. 333-52594) filed December
22, 2000.

10.3 First Amendment to Amended and Restated Vishay Intertechnology, Inc.
Long Term Revolving Credit Agreement and Other Loan Documents, dated
as of August 31, 2000, by and among Vishay and the Permitted Lenders
(as defined therein), Comerica Bank and the other Lenders signatory
thereto, and Comerica Bank, as administrative agent. Incorporated by
reference to Exhibit 10.2 to the Company's Registration Statement on
Form S-3 (No. 333-52594) filed December 22, 2000.

10.4 Second Amendment to Amended and Restated Vishay Intertechnology,
Inc. Long Term Revolving Credit Agreement and Consent, made as of
December 13, 2002, by and among Vishay Intertechnology, Inc. the
Permitted Borrowers (as defined), Comerica Bank and the Lenders
signatory thereto and Comerica Bank as administrative agent.
Incorporated by reference to Exhibit 4.6 to Form 8-K filed on
December 13, 2002.

10.5 Employment Agreement, dated as of March 15, 1985, between the
Company and Dr. Felix Zandman. Incorporated by reference to Exhibit
10.12 to the Company's Registration Statement on Form S-2 (No.
33-13833).

10.6 Vishay Intertechnology 1995 Stock Option Program. Incorporated by
reference to the Company's Definitive Proxy Statement on Schedule
14ADR filed April 7, 1995.

10.7 Vishay Intertechnology 1997 Stock Option Program. Incorporated by
reference to the Company's Definitive Proxy Statement on Schedule
14A filed April 16, 1998.

10.8 Vishay Intertechnology 1998 Stock Option Program. Incorporated by
reference to the Company's Definitive Proxy Statement on Schedule
14A filed April 16, 1998.

10.9 Money Purchase Plan Agreement of Measurements Group, Inc.
Incorporated by reference to Exhibit 10(a)(6) to Amendment No. 1 to
the


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Company's Registration Statement on Form S-7 (No. 2-69970).

10.10 Agreement Amending Supply Agreements among Cabot Corporation through
its Cabot Performance Materials Division, Vishay Sprague, Inc. and
Vishay Intertechnology, Inc. dated as of June 6, 2002.

21. Subsidiaries of the Registrant. 23. Consent of Independent Auditors.

99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Dr.
Felix Zandman, Chief Executive Officer.

99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Richard
N. Grubb, Chief Financial Officer.




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