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Cree Updates Financial Targets
for the Third Quarter of Fiscal 2011

Decline in gross margin targets is attributable primarily to increased pricing pressure

Cree, Inc. Press Release - 3/24/2011

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Cree XLamp LEDs, cool white to warm white

Cree XLamp LEDs, cool white to warm white

DURHAM, N.C. - Cree, Inc. (Nasdaq: CREE), a market leader in LED lighting, today announced revised financial targets for its fiscal third quarter ending March 27, 2011. Revenue targets have been reduced to a range of $215 million to $220 million primarily due to lower sales of LED chips and LED components.

LED component demand is improving post-Chinese New Year, yet revenue is lower than originally targeted. It has taken longer to work through customer inventories than previously anticipated and pricing was lower than the company had previously forecast.

The LED chip business is also weaker than targeted due to more aggressive pricing and weaker demand.

Gross margin for the quarter is expected to be approximately 43%. The decline in gross margin targets is attributable primarily to increased pricing pressure in the LED chip product line.

Operating expenses are expected to be slightly lower than previously targeted.

"The LED components business appears to be turning the corner," stated Chuck Swoboda, Cree's CEO and chairman. "Despite the challenges we faced in Q3, distributor sell-through has improved and we target solid growth next quarter. Based on our preliminary outlook for Q4, we are currently targeting revenue to increase 10 to 12% in fiscal Q4 led by growth in LED components."

The company plans to hold a conference call and web broadcast today (March 23, 2011) at 9:00 a.m. U.S. EDT to discuss these updated targets. The dial-in number for the conference call is 800-374-1789 (973-200-3386 international) and the conference ID is 54519724. The conference call will be available to the public through a live audio web broadcast via the internet. Log on to Cree's website at and go to "Investor Relations - Financial Events and Presentations" for webcast details. The call will be archived and available on the website through April 6, 2011.

About Cree, Inc.

Cree is leading the LED lighting revolution and making energy-wasting traditional lighting technologies obsolete through the use of energy-efficient, environmentally friendly LED lighting. Cree is a market-leading innovator of lighting-class LEDs, LED lighting, and semiconductor solutions for wireless and power applications.

Cree's product families include LED fixtures and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and radio-frequency/wireless devices. Cree solutions are driving improvements in applications such as general illumination, electronic signs and signals, variable-speed motors and wireless systems.

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