EXHIBIT 10.11

                                                                March 30, 1999

                           TRANSFORMATION AGREEMENT

between

Siemens AG HL

a company incorporated under the laws of the Federal Republic of Germany,  whose
registered office is at Wittelsbacherplatz 2, 80312 Munich

- - hereinafter referred to as SIEMENS

and

CREE Research, Inc.

a company incorporated under the laws of North Carolina, whose registered office
is at 4600 Silicon Drive, Durham, NC 27703.

- - hereinafter referred to as CREE

and

OSRAM Opto Semiconductors GmbH & Co. OHG

a company incorporated under the laws of the Federal Republic of Germany,  whose
registered office is at Wernerwerkstrasse 2, 83049 Regensburg,

- - hereinafter referred to as OSRAM OS

Whereas -

the parties hereto except OSRAM OS have entered into a Development,  License and
Supply  Agreement  dated  October  25,  1995,  and a  Purchase  Agreement  dated
September 6, 1996 and amendments thereto  (hereinafter  referred to collectively
as the "Agreements").

which are in full force and effect, unconditional and unterminated as of
today.

SIEMENS as party to the  Agreements,  now  intends to transfer  its  position as
party to the Agreements to its subsidiary, OSRAM OS.

OSRAM OS wishes to take over  SIEMENS'  position  and become  party  instead and
place of SIEMENS.



Now it is hereby agreed as follows:

With effect as of January 1st, 1999 the Agreements shall be modified as follows:

      Siemens Aktiengesellschaft, a company incorporated in the Federal Republic
      of Germany  and having its  registered  address at  Wittelsbacherplatz  2,
      Postfach 10 12 12, D 80312 Muenchen, the Federal

      Republic of Germany,

      in each case shall be substituted by:

      OSRAM  Opto  Semiconductors  GmbH & Co.  OHG,  Wernerwerkstrasse  2, 93049
      Regensburg, the Federal Republic of Germany, "OSRAM OS".

      Consequentially,  each  reference  in the  wording  of the  Agreements  to
      "Siemens" or "Siemens HL" shall be deemed to read "OSRAM OS" instead.

      Nothing herein shall be construed to release  SIEMENS from its obligations
      under the Agreements,  including but not limited to its  obligations  with
      respect to  confidential  information  of CREE,  and SIEMENS  shall in all
      events remain responsible for performance of the Agreements by OSRAM OS.

      Correspondence of technical, commercial or sales-related content necessary
      in the course of performing  this  agreement  shall pass directly  between
      Siemens HL OS and the competent departments at OSRAM OS, Wernerwerkstrasse
      2, 93049 Regensburg.

Apart from the above  changes,  the  Agreements  shall remain  unaltered in full
force and effect.

OSRAM OS agrees to be bound by and  comply  with the  Restricted  Use  Agreement
(RUA) dated  October 1, 1994  between  Siemens and Cree with  respect to all SiC
material supplied by Cree.

Durham, dated this March 30, 1999

 ..../s/..............................
CREE Research, Inc.

Regensburg, dated this ...30.3.., 1999    Regensburg, dated this ....30.3..,
1999



 ..../s/..............................    ..../s/................................
SIEMENS AG HL                            OSRAM Opto Semiconductors
                                          GmbH & Co. OHG