People who say squats are bad for the knees don't know how to squat properly. When a squat is performed correctly, there should be no knee pain (barring a pre-existing condition). When you squat, do the following during the descending portion of the lift:
On the ascending portion of the squat:
Know what proper depth is, especially if you want to take credit for the amount of weight you squat. For our purposes, proper depth is achieved when the hips are either even with or slightly below the knees.
If you can't squat to parallel, then you have mobility problems that need to be addressed. There's a limit to how low you should go however. Don't force your body into a depth it's not ready for or you'll start to butt wink (see photo below) and could do some serious damage to your lower back. Butt wink is when your lower back rounds and your pelvis rotates back.
If you can't get your hips at knee level when squatting, you're doing a partial rep, which will primarily work the quads.
Although there's nothing wrong with a partial squat if your goal is to nail the quads, full range of motion (ROM) should be your go-to depth. Your glutes and hamstrings engage the most when you squat to proper depth. If you're going to parallel or below you can be sure that your glutes are firing. And when they do, you'll decrease the stress on your knees.