EXHIBIT 99.1
PRESS RELEASE

Contact: Raiford Garrabrant
         Director, Investor Relations
         Cree, Inc.
         raiford_garrabrant@cree.com
         (T) 919-313-5397
         (F) 919-313-5615


          CREE ANNOUNCES PLANS TO CLOSE ITS SILICON MICROWAVE BUSINESS
                      TO FOCUS ON WIDE BANDGAP RF PRODUCTS

Durham,  NC, June 2, 2005 - Cree,  Inc.  (Nasdaq:  CREE) today announced that it
plans to close the silicon  radio  frequency  (RF) and  microwave  semiconductor
business  of its wholly  owned  subsidiary,  Cree  Microwave,  Inc.,  located in
Sunnyvale,   California.  This  business  manufactures  silicon-based  laterally
diffused metal oxide  semiconductor  (LDMOS) and bipolar  products.  The Company
intends to focus on wide bandgap RF and microwave  products based on its silicon
carbide (SiC) and gallium nitride (GaN)  technology.  Cree Microwave will accept
last time buy orders for its silicon LDMOS products  through June 2005 and plans
to wind down the  operations of this business by December  2005. The decision to
discontinue the Sunnyvale  operation was based upon  management's  review of the
strategic  alternatives and the financial outlook for the business. For the nine
months ended March 27, 2005, the Company  incurred net operating  pre-tax losses
of $9.2 million related to this segment of its business, or $0.08 per share, net
of tax, assuming the Company's estimated 31.1% tax rate for fiscal 2005.

The Company estimates that it will incur a total of approximately $13 million to
$15 million in pre-tax expenses to close the Sunnyvale facility. Of these costs,
cash charges will include $1.8 million to $1.9 million for  severance  and other
employee related costs, relocation of production equipment and other expenses to
wind down the  Sunnyvale  operations  over the next six months.  Other  non-cash
charges related to the closing of the facility  include $6 million to $8 million
in impairment  charges related to inventory and equipment and approximately $4.7
million for lease obligations. The Company targets that approximately $7 million
to $9 million of these charges will be expensed in the fourth  quarter of fiscal
2005,  while the remaining  charges are expected to be recorded in the first and
second quarters of fiscal 2006.

The silicon RF business operated at the Sunnyvale  facility has been referred to
as the  Company's  Cree  Microwave  segment for  financial  reporting  purposes.
Although this segment will no longer be used for financial  reporting  purposes,
the  Company's  wide  bandgap  RF and  microwave  products  based on SiC and GaN
technology will continue to be marketed under the Cree Microwave brand.

The Company  also  announced  that the  parallel  production  of Schottky  diode
products  recently  qualified in the Sunnyvale  facility will be consolidated in
the Durham, North Carolina location in the first half of fiscal 2006.

About Cree, Inc.

Cree is an advanced  semiconductor  company that  leverages its expertise in SiC
and 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 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.

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 may differ  materially due to a
number of  factors,  including  increases  in cash  expenditures  related to the
discontinuation of operations in Sunnyvale, California; Cree Microwave's ability
to sublease the Sunnyvale  facility;  the amount of last-time buy orders and the
time needed to fulfill such orders for silicon  products,  the Company's ability
to complete  the  wind-down  process by the end of calendar  year 2005,  general
economic  conditions  and other  factors  discussed  in Cree's  filings with the
Securities  and Exchange  Commission,  including its report on Form 10-K for the
year ended June 27, 2004 and subsequent filings.

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