SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

Mail Stop 3030
January 29, 2009

VIA U.S. MAIL and FACSIMILE: (919) 313-5536

  Mr. John T. Kurtzweil Executive Vice President and Chief Financial Officer Cree, Inc.  4600 Silicon Drive Durham, NC 27703

 RE: Cree, Inc.
Form 10-K for Fiscal Year  Ended June 29, 2008
Filed on August 20, 2008
  File No. 000-21154

Dear Mr. Kurtzweil:
 We have reviewed your filings and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Mr. John T. Kurtzweil
Cree, Inc.
January 29, 2009
Page 2

Form 10-K for the Fiscal Year Ended June 29, 2008

Item 1A.  Risk Factors, page 10
 1. We note a number of your risk factors could apply to almost any business. For
example, many of the 21 bullet points in your first risk factor describe matters that
could apply to any registrant.  In future filings, please ensure your risk factors specify the risks you face and quantify thei r impact so investors can evaluate how
those risks affect your business.  See Item  503(c) of Regulation S-K.  Also, please
disclose all material risks pursuant to this item and avoid using language in the
heading paragraph before the first risk factor that would imply otherwise.
 Item 11.  Executive Compensation, page 87

Compensation Discussion and Analysis, page 28
 2. In future filings, throughout your Compen sation Discussion and Analysis please
include a comprehensive discussion of how you determined each named executive
officers’ compensation.  This disclosure  should include a discussion about each
element of compensation such as base salary, cash bonus and long term equity incentive compensation.  Your Compen sation Discussion and Analysis should
also be sufficiently precise to identif y material differences in compensation
policies with respect to individual ex ecutive officers.  This should include
explanation of the reasons for the diffe rences in the amounts of compensation
awarded to the named executive officers.  We refer you to Release 33-8732A, Section II.B.1.  For example, we note the disparity between your chief executive
officer’s compensation and that of th e other named executive officers and your
future filings should provide a more de tailed discussion of how and why your
chief executive officer’s compensation di ffers from that of the other named
executive officers.  See Item 402(b)(2 )(vii) of Regulation S-K.
 3. We note you state in the third full paragraph on page 29 of your proxy statement
that you use two compensation data from two sources.  While it appears you have listed the “peer group” companies in the subsequent paragraph, it does not appear
you have identified the four different  published market surveys or their
components.  In future filings, please identify the surveys you used and their
components, including component companies, the elements of compensation that are benchmarked and how such benchmarks are determined.

Mr. John T. Kurtzweil
Cree, Inc.
January 29, 2009
Page 3   4. We note your disclosure that you seek “… a target range that is between the 50
th
percentile and the 75th percentile of competitive market compensation…,” but that
base salary may “vary from the target  range….”  Given that you target the
elements of your compensation packages, pl ease briefly discuss in your applicable
future filings how each element of compensation you provide to the named executive officers relates to the data you have analyzed from the peer companies
and include an analysis of where actual payments  under each element of
compensation actually fell within the targeted range.  If any of your named executive officers are compensated at levels  that are materially different from the
targeted levels of compensation, please also  provide discussion and analysis as to
why.  Refer to Item 402(b)(2)(xiv) of Regulation S-K.
 Base Salary, page 30

 5. We note your disclosure about how annual salaries are set taking into account
“the Company’s performance, the execu tive’s experience, qu alifications and
scope of responsibilities, the goals and objectives established for the executive,
[and the] performance of the executive.”  In future filings, please describe
specifically how these factors were used to make compensation decisions during the applicable periods, including discussing how the committee determined the
compensation amounts and avoiding the use of boilerplate disclosure in this
section.  If instead compensation de cisions were based on the subjective
discretion of the committee, please say so clearly and directly without implying that objective factor s were used.
 Performance-Based Incentive Compensation, page 30

 6. You provide little discussion and analysis of the effect of i ndividual performance
on incentive compensation despite disclosure  suggesting it is a significant factor
considered by the committee.  In future filings, please provide additional disclosure and analysis of  how individual performan ce contributed to actual 2008
compensation for the named executive officers.  For example, disclose the elements of individual performance, both quantitative and qualit ative, and specific
contributions the compensation committee considered in its evaluation, and if applicable, how they were weighted and factored into specific compensation decisions.  Also expand your discussion a nd analysis of the factors the committee
considered in establishing personal objectives for Mr. Swodoba.  Please see Item 402(b)(2)(vii) of Regulation S-K.

Mr. John T. Kurtzweil
Cree, Inc.
January 29, 2009
Page 4  Performance Units, page 32

 7. We note your discussion of the incentive award to Mr. Swoboda in the form of
performance units.  While you state “[t] his provided flexibility to require a
portion of any future payments under the award be paid in shares” and permitted
the award to “qualify for the perfor mance based exemption under Section
162(m),” please tell us why payment of sh ares to Mr. Swoboda was important to
the committee and why this program was not extended to other officers.  Please revise future filings to expand your disclosure about such awards including
clarifying the reasons for such awards.
 Long-Term Equity Incentive Compensation, page 33

 8. In future filings, please explain with specificity how you determined the amounts
of stock options to be granted to you r named executive officers.  We note you
state on the top of page 34 that the awards were the same as the prior year, yet revenue was below target and earnings onl y approximated the plan targets.  Please
tell us why “revenue was below target es tablished at the beginning of fiscal 2007
under the 2008 Plan,” yet on page 32 you a ppear to have achieved just over 100%
of the revenue target under the 2008 Plan.  In future filings, please describe the elements of “corporate performance” and “individual performance” that are taken
into account in granting thes e options.  Your revised disc losure also should clarify
the reasons for the relative size of the grants among the officers.

Item 13.  Certain Relationships and Related Transactions…, page 87

Certain Transactions, page 7
 9. We note you do not appear to have filed as exhibits the agreements described in
this section including the Transition Se rvices Agreement between COTCO and
Holdings.  Please tell us where you have f iled these agreements or file them in
future filings.  See Item 601(b)(10) of Regulation S-K.
 10. We note your disclosure here is nearly identical to the disclosure in Note 15 to
your financial statements.  In future filings, please ensure that each related party transaction required to be described under Item 404(a) of Regulation S-K is clearly described in this section includi ng the name of the related person and the
related person’s interest in the transaction, rather than using the disclosure from
the financial statements, which may apply a different standard that Item 404(a).
For example, it is unclear from your disc losure regarding Light Engine and LFF
who is the related party and what is their interest in the transaction.

Mr. John T. Kurtzweil
Cree, Inc.
January 29, 2009
Page 5  Review and Approval of Related Person Transactions, page 9

 11. We note your disclosure that the Audit Committee is responsible for the approval
of related person transactions.  In future  filings, please expand your disclosure to
more closely conform to Item 404(b) of Regulation S-K.  For example, include a
discussion of the types of transactions  that are covered by such policies and
procedures, the standards to be applied pursuant to such policies and procedures,
and how such policies and procedures are evidenced.
 Form 8-K filed as of October 21, 2008

Exhibit 99.1, page 7

12. We note that you present your non-GAAP meas ures in the form of Consolidated
Statements of Income. This format may be  confusing to investors as it reflects
several non-GAAP measures, including (a nd not necessarily limited to) non-
GAAP cost of sales, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales, general and administrative expense, non-GAAP
amortization of acquisition related inta ngibles, non-GAAP operating expenses,
non-GAAP operating income, non-GAAP income  from continuing operations,
non-GAAP income taxes expense (benefit), non-GAAP net income and non-GAAP earnings per share. In fact, it app ears that management does not use these
non-GAAP measures but they are shown here  as a result of the presentation
format.  Please note that Instruction 2 to  Item 2.02 of Form 8-K requires that
when furnishing information under this item  you must provide all the disclosures
required by paragraph (e)(1)(i) of Item  10 of Regulation S-K, including a
reconciliation to th e directly comparable GAAP measure for each  non-GAAP
measure presented and explain why you be lieve the measures provide useful
information to investors.

• To eliminate investor confusion, plea se remove the non-GAAP consolidated
statements of operations from all future filings and instead disclose only those non-GAAP measures specifically used by management that you wish to highlight for investors, with the appropriate reconciliations.

• Please note that in the event that your Form 8-K is incorporated by reference
into a 1933 Act registration statement,  we may have additional questions
relating to the appropriate ness of this information being included in a
document filed with, and not just furnis hed to, the Commissi on.  At that time,
we may request an amendment to the Form 8-K.

*****

Mr. John T. Kurtzweil
Cree, Inc.  January 29, 2009
Page 6
 As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Pl ease furnish a cover letter that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendmen t and responses to our comments.
   We urge all persons who are responsi ble for the accuracy an d adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:  ‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.     You may contact Jong Hwang at (202) 551-3327 or me at (202) 551-3676 if you
have questions regarding comments on the fi nancial statements and related matters.
Please contact Celia Soehner at (202) 551- 3463 or Jay Mumford, Senior Attorney, at
(202) 551-3637 with any other questions.
Sincerely,

Brian Cascio Accounting Branch Chief