Fitch affirms KLA-Tencor

Fitch Ratings said it affirmed KLA-Tencor Corp.'s issuer default rating at BBB and its senior unsecured debt at BBB.

The outlook is stable.

The ratings are supported by the company's strong market share positions, its conservative financial policies and the secular long-term growth trends, according to the agency.

Concerns are KLA-Tencor's need for substantial ongoing investments in research and development as well as sales and marketing, substantial customer concentration and highly cyclical demand patterns for the semiconductor equipment market, the agency said.

The company's total debt to operating EBITDA is below 1x.

The ratings incorporate expectation that the company will use free cash flow to fund a combination of share repurchases and acquisitions, Fitch said.

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