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      March 13,
2009

      VIA EDGAR AND FEDERAL
EXPRESS

      United
States Securities and Exchange Commission

      Division
of Corporation Finance

      450 Fifth
Street, N.W.

      Washington,
D.C.  20549-0306

      Attention:
Jay Mumford, Senior Attorney

      Re:           Cree,
Inc.

      Annual Report on Form 10-K for the
fiscal year ended June 29, 2008

      Filed on August 20, 2008

      File No. 000-21154

      Dear Mr.
Mumford:

      Set forth
below are our responses to the comments of the staff of the Division of
Corporation Finance of the Securities and Exchange Commission contained in the
comment letter dated February 27, 2009, relating to the Form 10-K for Fiscal
Year Ended June 29, 2008 of Cree, Inc. (the “Company”).  This letter
includes each comment from the letter in italics, with the Company’s response
set forth immediately below.  The Company has repeated the headings
and paragraph numbers from the letter for your convenience.

        Item 11. Executive
Compensation, page 87

      Compensation Discussion and
Analysis, page 28

                1.

                We
      note
      your response to our prior comment 3.  Please note that if you
      benchmark, you must provide the disclosure required by Regulation S-K Item
      402(b)(2)(xiv).  This includes identifying the benchmark and all
      component companies.  In future filings, please clearly identify
      each component company used by your consultant or otherwise.  We
      note this may be a large list, depending on your
      benchmark.

        United
States Securities and Exchange Commission

        Division
of Corporation Finance

        Page
2

RESPONSE:

        The
Company acknowledges the Staff’s comment.  In future filings, if we
benchmark we will provide the disclosures required by Regulation S-K Item
402(b)(2)(xiv).

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

      Certain Transactions, page
7

                2.

                We
      note your
      response to prior comment 9.  It is unclear how you determined
      that the three agreements you identify are immaterial in amount and
      significance.  For example, it is unclear how an exclusive
      supply agreement with a related party or an agreement with a value over
      $1.4 million with a related party that is disclosed in the related party
      section of your proxy can be immaterial.  Please provide us your
      analysis for excluding these related party agreements as immaterial,
      including any authority upon which you rely, or please file these
      agreements as exhibits in future
filings.

      RESPONSE:

        The
Company acknowledges the Staff’s comment and respectfully submits that it has
located no SEC guidance indicating that if a related person transaction must be
disclosed in the proxy statement pursuant to Regulation S-K Item 404(a), a
contract evidencing such a transaction must also be filed pursuant to Regulation
S-K Item 601(b)(10)(ii)(A).  Rather, the determination of whether a
contract in the ordinary course of business with a security holder named in the
report must be filed under Item 601(b) appears to be independent of whether the
transactions the contract evidences must be disclosed in the proxy
statement.  Item 601(b)(10)(ii)(A) provides that contracts in the
ordinary course of business with security holders who must be named in the
report are required to be filed only if the contract is not immaterial in amount
or significance.

        The
Company has located no SEC guidance for determining when a contract in the
ordinary course of business with a security holder named in the report may be
considered immaterial in amount or significance under Item 601(b)(10)(ii)(A) and
thus need not be filed.  Lacking specific guidance, the Company
evaluated each of these contracts by considering whether the amount payable
under the contract is immaterial for financial reporting purposes and whether
the contract is significant to the Company’s business as a whole.  The
Company respectfully submits the following analysis of why each of the contracts
is immaterial in amount and significance and accordingly is not required to be
filed under Regulation S-K Item 601(b)(10)(ii)(A).

            United
States Securities and Exchange Commission

            Division
of Corporation Finance

            Page
3

                ·

                Transition
      Services Agreement, dated March 30, 2007, between COTCO Luminant
      Device Limited (now Cree Hong Kong Limited or COTCO), COTCO Holdings
      Limited (now known as United Luminous International (Holdings) Limited or
      Holdings), and the Company.

        This contract
is immaterial to the Company in amount, as the net amount of fees COTCO paid
Holdings annually for transition services is less than $250,000.  The
net amount paid under this contract in our fiscal 2008 was approximately 0.05%
of the Company’s total cost of revenue plus total operating expenses for the
year.  This percentage is immaterial for financial reporting
purposes.

          This contract
is also immaterial to the Company in significance, as it simply provided
for an orderly transition of administrative support services and facilities
following the Company’s acquisition of COTCO.

                ·

                Manufacturing Agreement,
      dated as of May 31, 2007, between Light Engine Limited and LED Lighting
      Fixtures, Inc. (now Cree LED Lighting Solutions, Inc. or
    LLF).

            This contract
is immaterial to the Company in amount.  The fees Light Engine charged
to LLF for lighting fixtures manufactured under the contract in the Company’s
fiscal 2008 subsequent to the acquisition of LLF by the Company were
approximately $1.4 million.  This amount was approximately 0.28% of
our revenue and approximately 0.43% of our cost of revenue for fiscal
2008.  We consider these percentages immaterial for financial
reporting purposes.

              This contract
is also immaterial to the Company in significance as the manufacturing
services being purchased are available from several sources and the products
manufactured under this contract represented less than 1% of the Company’s
revenues for fiscal 2008.

        United
States Securities and Exchange Commission

        Division
of Corporation Finance

        Page
4

                ·

                Distribution
      Agreement, dated as of May 31, 2007, between Light Engine Limited and LED
      Lighting Fixtures, Inc. (now Cree LED Lightings Solutions, Inc. or
      LLF).

        We note
that this contract granted an exclusive territory for only one of several LLF
products.  Light Engine has not purchased any products pursuant to this
contract.  Accordingly, the contract is immaterial in amount and
significance.

        If at any
time any of these contracts is no longer immaterial in amount or significance,
we will file the contract in accordance with Regulation S-K Item
601(b)(10)(ii)(A).  In our future filings, we will continue to
disclose the existence of the contracts, the approximate dollar value of
transactions under the contracts and the interest of the related parties to the
extent required by Regulation S-K Item 404(a).

      Review and Approval of
Related Person Transactions, page 9

                3.

                From
      your
      response to our prior comment 11 it is unclear whether you will disclose
      “the standards to be applied pursuant to [your related person transaction]
      policies and procedures, and how such policies and procedures are
      evidenced” as required by Item 404(b) of Regulation S-K.  Please
      advise how you intend to address these
  issues.

      RESPONSE:

        We note
that Item 404(b)(1) of Regulation S-K refers to the factors mentioned in the
Staff’s comment as examples of material features that may be present in a
registrant’s policies and procedures (and thus should be described) but does not
require a description or discussion of these factors in all cases or when not
present in the registrant’s policies or procedures.

        All of
the Company’s policies and procedures for the review, approval and ratification
of transactions required to be reported under Reg. S-K Item 404(a) are contained
in our Audit Committee charter as adopted by our Board of
Directors.  The charter provisions setting out these policies read, in
their entirety, as follows:

                    Related
      Person Transactions

                    The
      Company shall not be authorized to engage in any related
      person transaction unless the Committee approves the
      transaction.  For purposes of this paragraph the term “related
      person transaction” refers to transactions required to be

        United
States Securities and Exchange Commission

        Division
of Corporation Finance

        Page
5

                  disclosed
      pursuant to SEC Regulation S-K, Item 404, and to any other transaction for
      which Committee approval is required pursuant to applicable law or listing
      standards applicable to the
Company.

        In future
filings, we plan to expand our disclosures under Item 404(b) to describe these
charter provisions more fully.

      ****

       In
connection with the responses in this letter, the Company acknowledges
that:

                ·

                the
      Company is responsible for the adequacy and accuracy of the disclosure in
      the filings;

                ·

                staff
      comments or changes to disclosure in response to staff comments do not
      foreclose the Securities and Exchange Commission from taking any action
      with respect to the filings; and

                ·

                the
      Company may not assert staff comments as a defense in any proceeding
      initiated by the Securities and Exchange Commission or any person under
      the federal securities laws of the United
  States.

      If you
have any questions regarding any of the responses in this letter, please contact
me at (919) 313-5359.

      Sincerely,

      CREE,
INC.

        /s/
John T. Kurtzweil

      John T.
Kurtzweil

      Executive
Vice President and

      Chief
Financial Officer