EXHIBIT 99.01

Contact:  Cynthia Merrell
          Chief Financial Officer
          Cree, Inc.
          cynthia_merrell@cree.com
          (T) 919-313-5300
          (F) 919-313-5995


                  CREE REPORTS FINANCIAL RESULTS FOR THE SECOND
                           QUARTER OF FISCAL YEAR 2005

                     Revenue Increases to $97.5 Million with
                         EPS of $0.32 Per Diluted Share

Durham, NC, January 13, 2005 - Cree, Inc. (Nasdaq: CREE) today announced revenue
of $97,451,000 for the second quarter of fiscal 2005 which ended on December 26,
2004,  representing a 34 percent increase over the Company's comparable year ago
period revenue of  $72,684,000.  Net income for the second quarter  increased 92
percent to $25,022,000,  or $0.32 per share,  compared to $13,007,000,  or $0.17
per share,  as reported for the second quarter of fiscal 2004.  Gross margin for
the second  quarter of fiscal 2005 was 50.4  percent of revenue and  compares to
46.6 percent in the prior year period and to 56.0 percent reported for the first
quarter of fiscal 2005. Gross margin decreased sequentially due to increased LED
costs  associated with the three-inch  wafer conversion and X class product ramp
up, lower than  expected  December  LED  shipments  and lower LED average  sales
prices due to changes in product and customer mix.

During  the second  quarter  of fiscal  2005,  net  income  benefited  from $3.9
million,  or $0.05 per share, of net  non-operating  and other tax  adjustments.
These  adjustments   included  a  tax  benefit  associated  with  the  Company's
investment  in a public  company  offset by other tax  adjustments  and a charge
recorded for the decline in the value of a private  equity  investment.  EPS was
negatively  impacted by approximately  $0.01 per share due to an increase in the
number of fully diluted  shares  outstanding  resulting from the increase in the
Company's  stock price and  employee  stock option  exercises  during the second
quarter.

For the  six-month  period ended  December 26, 2004,  Cree  reported  revenue of
$193,348,000,  an increase of 39 percent over the $138,895,000  reported for the
comparable  period in fiscal year 2004. Net income for the six-month period more
than doubled to $49,450,000,  or $0.64 per share,  compared to  $21,886,000,  or
$0.29 per share, in the year ago period.

"Our  fundamentals  remain  strong and we continue to see strength in the demand
for our new products which has enabled us to continue to deliver solid financial
results.  Overall  gross  margin  decreased  in our  second  quarter,  but still
remained  healthy  at 50  percent  of our  sales,  particularly  in light of the
three-inch  chip  conversion  and product ramp up costs  experienced  during the
quarter," stated Chuck Swoboda,  Cree President and CEO. "Our focus in the third
quarter  will be to increase  market  share with our new X class LED products to
offset the  forecasted  seasonal  slow down in mobile  phone  production  and we
believe that we are well positioned based on our current backlog of orders."

Business Outlook:

For its third quarter of fiscal 2005, Cree currently  targets revenue in a range
of $94 to $98 million with earnings of $0.24 to $0.27 per diluted share.

Cree will host a conference  call at 5:00 p.m.  Eastern time today to review the
highlights  of the second  quarter  fiscal 2005  results  and the third  quarter
fiscal 2005 business  outlook,  including  significant  factors and  assumptions
underlying the targets noted above. The conference call will be available to the
public  through a live audio web  broadcast  via the  Internet.  Log onto Cree's
website  at  www.cree.com  and go to  "News &  Investor--Overview"  for  webcast
details.  The call will be archived and available on the website through January
27, 2005.

Supplemental financial information is available under "Q2 '05 Financial Metrics"
in    the    "Investor     Info"    section    of    Cree's    web    site    at
http://www.cree.com/news/metrics.asp.

About Cree, Inc.

Cree is an advanced  semiconductor  company  that  leverages  its  expertise  in
silicon carbide (SiC) and gallium nitride (GaN) materials  technology to produce
new and enabling  semiconductors.  The  products  include  blue,  green and near
ultraviolet  (UV) light emitting  diodes (LEDs),  power switching  devices,  and
radio frequency (RF) and microwave devices.  The Company is currently developing
near UV lasers.  Targeted  applications for these products  include  solid-state
illumination, power switching, wireless infrastructure and optical storage. Cree
understands  the important  convergence of science,  technology and  creativity,
placing  high value on ideas,  as well as the energy and  ability of its people.
For more information on Cree, please visit www.cree.com.

The schedules attached to this release are an integral part of the release. This
press  release   contains   forward-looking   statements   involving  risks  and
uncertainties,  both known and unknown,  that may cause actual results to differ
materially from those indicated.  Actual results,  including with respect to our
targets  and  prospects,  could  differ  materially  due to a number of factors,
including our ability to complete development and  commercialization of products
under  development,  such as our pipeline of brighter LEDs; our ability to lower
costs;  potential  changes in demand;  the risk that price  stability,  improved
operational efficiencies, and the favorable product mix we have experienced will
not  continue;  the  risk  that,  due to  the  complexity  of our  manufacturing
processes and transition of production to three-inch  wafers,  we may experience
production delays that preclude us from shipping  sufficient  quantities to meet
customer  orders or that result in higher  production  costs and lower  margins;
risks associated with the ramp up of our production for our new products;  risks
resulting from the concentration of our business among few customers,  including
the risk that  customers may reduce or cancel  orders or fail to honor  purchase
commitments; the rapid development of new technology and competing products that
may  impair  demand or render  our  products  obsolete;  the  potential  lack of
customer  acceptance  for  our  products;   our  ability  to  utilize  tax  loss
carryforwards in future periods;  risks  associated with securities  litigation;
and other  factors  discussed  in our filings with the  Securities  and Exchange
Commission, including our report on Form 10-K for the fiscal year ended June 27,
2004 and subsequent reports filed with the SEC.

Cree and the Cree logo are registered trademarks of Cree, Inc.

                                            CREE, INC.
                                 CONSOLIDATED STATEMENTS OF INCOME
                               (in thousands, except per share data)




                                               Three Months Ended             Six Months Ended
                                            12/26/2004   12/28/2003       12/26/2004   12/28/2003
                                            (Unaudited)  (Unaudited)      (Unaudited)  (Unaudited)
                                            -----------  -----------      -----------  -----------
                                                                           
Product revenue                              $ 91,446     $ 66,585         $181,632     $125,748
Contract revenue                                6,005        6,099           11,716       13,147
                                            -----------  -----------      -----------  -----------
Total revenue                                  97,451       72,684          193,348      138,895

Cost of product revenue                        43,275       33,216           81,211       65,719
Cost of contract revenue                        5,053        5,623            9,344       11,115
                                            -----------  -----------      -----------  -----------
Total cost of sales                            48,328       38,839           90,555       76,834

Gross profit                                   49,123       33,845          102,793       62,061

Operating expenses:
Research and development                       11,428        8,336           22,443       16,662
Sales, general and administrative               7,827        7,868           15,487       15,781
Loss on disposal of property and equipment        248          143              326          146
                                            -----------  -----------      -----------  -----------
Operating expenses                             19,503       16,347           38,256       32,589

Income from operations                         29,620       17,498           64,537       29,472

Non-operating income:
Gain (loss) on investments in securities       (1,992)           -           (1,874)           -
Other non-operating income                        123          407              128          410
Net interest income                             1,139          945            2,288        1,837
                                            -----------  -----------      -----------  -----------
Income before income taxes                     28,890       18,850           65,079       31,719

Income tax expense                              3,868        5,843           15,629        9,833
                                            -----------  -----------      -----------  -----------
Net income                                   $ 25,022     $ 13,007         $ 49,450     $ 21,886
                                            ===========  ===========      ===========  ===========

Earnings per share, diluted                  $   0.32     $   0.17         $   0.64     $   0.29
                                            ===========  ===========      ===========  ===========

Weighted average shares of common
   stock outstanding, basic                    75,383       74,206           74,443       74,190

Weighted average shares of common
   stock outstanding, diluted                  78,298       76,005           77,020       75,881



                                   CREE, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except per share data)




                                                       12/26/2004     6/27/2004
                                                       (Unaudited)    (Audited)
                                                       -----------    ----------
Assets:
Current assets:
Cash and equivalents and short term
   investments held to maturity                         $ 200,987     $ 158,163
Accounts receivable, net                                   53,732        47,766
Inventories, net                                           25,110        19,428
Deferred income taxes                                       2,560         2,560
Prepaid expenses and other current assets                   9,394         6,976
                                                       -----------    ----------
Total current assets                                      291,783       234,893

Property and equipment, net                               324,182       273,342
Long-term investments held to maturity                     85,692        72,730
Patents and license rights, net                            20,835        19,831
Marketable securities available for sale                   35,195        22,002
Other assets                                                2,187         5,202
                                                       -----------    ----------
Total assets                                            $ 759,874     $ 628,000
                                                       ===========    ==========

Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable trade                                  $  38,639     $  25,102
Accrued salaries and other expenses                        10,840        11,443
Income tax payable                                         15,842             -
Deferred revenue                                            7,955         8,437
                                                       -----------    ----------
Total current liabilities                                  73,276        44,982

Long term liabilities:
Deferred income taxes                                       1,857         3,886
                                                       -----------    ----------
Total long term liabilities                                 1,857         3,886

Shareholders' Equity:
Common stock                                                   95            91
Additional paid in capital                                554,448       506,275
Other comprehensive income, net of tax                     13,609         5,627
Retained earnings                                         116,589        67,139
                                                       -----------    ----------
Total shareholders' equity                                684,741       579,132
                                                       -----------    ----------
Total liabilities and shareholders' equity              $ 759,874     $ 628,000
                                                       ===========    ==========


                                        CREE, INC.
                               OPERATING SEGMENT INFORMATION
                                      (in thousands)




                                          Three Months Ended          Six Months Ended
                                       12/26/2004   12/28/2003    12/26/2004   12/28/2003
                                       (Unaudited)  (Unaudited)   (Unaudited)  (Unaudited)
                                       -----------  -----------   -----------  -----------
                                                                   
Revenue:

Cree*                                   $ 95,937     $ 70,701      $190,398     $135,861
Cree Microwave                             1,514        1,983         2,950        3,034
                                       -----------  -----------   -----------  -----------
Total revenue                           $ 97,451     $ 72,684      $193,348     $138,895
                                       ===========  ===========   ===========  ===========

Net income (loss) before income taxes:

Cree*                                   $ 31,973     $ 21,440      $ 71,333     $ 37,711
Cree Microwave                            (3,083)      (2,590)       (6,254)      (5,992)
                                       -----------  -----------   -----------  -----------
Total net income before income taxes    $ 28,890     $ 18,850      $ 65,079     $ 31,719
                                       ===========  ===========   ===========  ===========




* Includes interest income and other segment operating results