U.S.-based semiconductor equipment manufacturer KLA Corp. has outperformed its peers through the semiconductor industry downturn because of its sustained technology leadership in process control and more diversified end market. We believe the company will expand in line with or exceed industry growth over the next several years given semiconductors' continued investments in newer technologies that will require greater process control intensity. We are upgrading KLA to 'BBB+' from 'BBB', and raising our issue-level rating on its debt to 'BBB+' from 'BBB'. The stable outlook reflects our view that KLA will maintain its strong market position in the process control and yield management segments of the semiconductor capital equipment industry, maintaining a conservative financial policy including adjusted leverage below 2x. The
