Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Matt Sheerin.
Matt Sheerin - Thomas Weisel Partners
Yes, thank you. So, Dr. Paul, you gave somewhat of a vague outlook, and I appreciate the fact that visibility is limited. But it sounds like you expect your semiconductor business to be up slightly and the passive business to be down slightly. So, are we to sort of conclude that you are looking at sort of flattish overall sales?
Gerald Paul
Yes. Principally this is what we expect. But as you said, this is a time of maybe already some kind of recovery. Predictability is relatively low. But principally, this is the mechanic. We would say actives should be up very likely, and passives show still some signs of decline, especially in Europe.
Matt Sheerin - Thomas Weisel Partners
And in automotive, are you seeing any light at the end of the tunnel there? Are you seeing any signs that you're seeing a little bit of a pickup, inventory restocking or anything like that?
Gerald Paul
Unfortunately, at the moment, automotive, I see mainly Europe, as you can imagine. There are no too encouraging signs unfortunately. This is the case.
Matt Sheerin - Thomas Weisel Partners
Okay. And then on the margin front, well, two questions. One, are you expecting margins to be flat or up because of continued cost cutting? And you talked about a lower revenue level for breakeven. Could you tell us what that revenue level would be for breakeven?
Gerald Paul
Didn't want to be that quantitative, but as you can imagine, we were bringing down fixed costs quite dramatically in the first quarter, as we announced it really. And we wanted to work for it. When things get better, we will be very careful to add back any fixed costs, you understand? So therefore, it's really an easy prediction in that sense. We are going to lower the breakeven point of Vishay by hundreds of millions of U.S. dollars. I don't want to be more specific, but I think I am clear enough.
Matt Sheerin - Thomas Weisel Partners
Okay. So, you are expecting a little bit of one of these margins to be flat up then?
Gerald Paul
Yes. For the profitability standpoint quarter-over-quarter, I didn't give any guidance, but you should understand the following. If the economy will develop the way I expected, we are going to have a somewhat bad mix impact, because some specialty products in passives, especially in Europe, will be relatively down, whereas actives with somewhat lower contributive margins will be up.
- To read the full transcript on Seeking Alpha, click here »
