Cree Announces Record Revenue And Earnings For Fiscal Year 2001

Fourth Quarter Revenue and Earnings In Line With Guidance

Durham, NC. Cree, Inc., (Nasdaq: CREE) today reported record revenue for the year of $177,227,000, an increase of 63 percent, compared to revenue of $108,562,000 in the prior year. Product revenue increased 65 percent to $159,533,000 over the $96,742,000 reported in the prior year. Net income, excluding intangible amortization and a one-time charge for in-process research and development as a result of the acquisition of UltraRF, rose 58 percent to $48,283,000, or $0.64 per diluted share, compared to $30,520,000, or $0.43 per diluted share (as adjusted for the company s 2-for-1 stock split in December 2000), for the corresponding period.

For the fourth quarter of fiscal 2001, the company reported revenue of $44,726,000, a 34 percent increase over the $33,359,000 reported for the prior year period. Net income, excluding intangible amortization was $8,044,000, or $0.11, per diluted share, compared to the $11,357,000, or $0.15, per diluted share, reported in the comparable period for the prior year (as adjusted for the company s 2-for-1 stock split in December 2000). On July 26, 1999, Cree effected a 2-for-1 split of its common stock. The share and per share amounts included in this release are presented on a post-split basis.

Chuck Swoboda, President and Chief Executive Officer stated, "We were pleased to report revenue and earnings within the targeted range we had outlined at the end of our third quarter despite the difficult economy and the increased internal resources we have devoted to R&D. Financially, we believe we are extremely well positioned and will continue investing in R&D to grow our business and increase our market penetration. We believe that by delivering new products while targeting net margins near 20 percent and building our net cash position, we are aligning the company to capitalize on the opportunities emerging in the marketplace. We are focused on bringing the next generation products to market as expeditiously as possible. We believe that these new products will help drive new product revenue in the current fiscal year."

Cree, Inc. will host a conference call at 4:30 p.m. EDT today to review the details of the fourth quarter. The conference call will be available to all interested parties through a live audio web broadcast via the Internet. Log onto Cree s website at www.cree.com and go to "Investor Info" for webcast details. The call will be archived and available on the website through July 31, 2001.

North Carolina-based Cree, Inc. develops and manufactures semiconductor materials and devices based on silicon carbide (SiC), gallium nitride (GaN) and related compounds. The company s products include blue, green and UV LEDs, RF power transistors for use in wireless infrastructure applications, SiC crystals used in the production of unique gemstones and SiC wafers sold for use in research and development. Cree has new product initiatives based on its experience in SiC and GaN-based semiconductors, including blue laser diodes for optical storage applications, high frequency microwave devices for radar and other communications systems, and power devices for power conditioning and switching. For more information on Cree, visit http://www.cree.com.

The schedules attached to this release are an integral part of this release. This press release contains forward-looking statements involving risks and uncertainties that may cause actual results to differ materially from those indicated including statements regarding targeted financial results for future periods. Actual results could differ materially due to a number of factors, including uncertainty regarding economic conditions; risks from increased competition; uncertain product demand; uncertainty whether we can achieve our targets for increased yields and cost reductions needed to permit lower product pricing without margin reductions; risks associated with the production ramp-up for our MegaBright(tm) blue and MegaBright(tm) UV LED chips, including the possibility of unexpected delays, increased costs and manufacturing difficulties or less than expected market acceptance; risks associated with the planned release of new products under development, including the possibility we will be unable to develop and manufacture commercially viable versions of such products; the risk that our investments in third parties will generate losses; the possibility of adverse results in our pending intellectual property litigation; uncertainty whether our intellectual property rights will provide meaningful protection; concentration of our business among few customers; and other factors discussed in our filings with the Securities and Exchange Commission, including our report on Form 10-K for the year ended June 25, 2000 and subsequent reports filed with the Commission.

Cree and the Cree logo are registered trademarks, and MegaBright is a trademark, of Cree, Inc.

Contact: Fran Barsky Investor Relations Manager Cree, Inc. Tel: 919-313-5397 Fax: 919-313-5452