KLA Corp. has benefited from a historic increase in wafer fabrication equipment (WFE) capital spending over the past two years to nearly double revenue and EBITDA. We expect growing capital intensity at leading nodes and industry-leading technology in process control to continue to support moderated, if still above-market revenue growth over the next two years. We upgraded KLA by one notch to 'A-', reflecting the firm's improving scale, superior profitability, and leading market share in core semiconductor process control (SPC) markets. The stable outlook is founded on our view that KLA will maintain adjusted net leverage under 2.0x through future industry cycles due to its consistent cash flow generation and growing recurring revenue from its services business. We also assigned
