NEW YORK, April 22 (Reuters) - Hedge fund Mountaineer

Partners is urging discrete electronic components maker Vishay

Intertechnology ( VSH ) to buy back $600 million worth of stock

this year, citing the company's "irrationally low valuation,"

according to a letter reviewed by Reuters.

New York-based Mountaineer, which owns 1.7% of Vishay, in a

letter to the board on Monday said that Vishay has cash on its

balance sheet it doesn't need and could use more sensibly to

repurchase stock.

"Given Vishay's overcapitalized balance sheet, the Board

should take advantage of Vishay's irrationally low valuation by

approving and implementing a $600 million accelerated share

repurchase," said the letter, signed by Mountaineer partner Greg

Williams said.

A representative for Malvern, Pennsylvania-based Vishay was

not immediately available for comment.

Mountaineer Partners argued that buying back $600 million in

stock this year is a "prudent mechanism" for boosting

shareholder returns given Vishay's $1.5 billion of cash and

revolver availability.

"A $600 million accelerated share repurchase ...

would serve as a significant catalyst to prompt market attention

and bring Vishay shares closer to fair value," the letter said.

Based on Vishay's Friday closing price of $20.90, $600

million would buy back 28.71 million shares. Vishay has 137.6

million shares outstanding.

Mountaineer has been invested in the $2.8 billion company,

whose products are used predominantly for electrifying the

automotive and industrial sectors, for six years.

The letter comes days after the company held its first-ever

investor day on April 2. Despite projections for strong revenue

and earnings growth for the next several years plus an

"exceptionally positive message" from CEO Joel Smejkal, Vishay's

shares traded lower after the investor day.

Since January, shares have dropped 11%. They dropped 5% in

the last month. The Philadelphia Semiconductor Sector index

has gained 3% since January.

Mountaineer said the market is feeling "apathy" toward the

company and urged to board and management, which would benefit

from a higher stock price in the wake of recent executive and

director compensation plan changes, to act quickly.