Solid State Lighting Revolution January 2010 Jovani Torres

Disclosure: Forward-Looking Statements This presentation includes forward-looking statements about Cree’s business outlook, future financial results, product markets, plans and objectives for future operations, and product development programs and goals. These statements are subject to risks and uncertainties, both known and unknown, that may cause actual results to differ materially, as discussed in our most recent annual and quarterly reports filed with the SEC.   Important factors that could cause actual results to differ materially include current uncertainty in global market conditions that could negatively affect product demand, collectability of receivables and other related matters; our ability to successfully develop new products; our ability to lower costs; increasing price competition; the complexity of our manufacturing processes and the risk of production delays and higher than expected costs; risks associated with the ramp-up of production for new and existing products; the rapid pace of technology development that could affect demand; and the difficulty of estimating future market demand for our products. The forward-looking statements in this presentation were based on management’s analysis of information available at the time the presentation was prepared and on assumptions deemed reasonable by management. Our industry and business are constantly evolving, and Cree assumes no duty to update such forward-looking statements to reflect subsequent developments.

Cree Founded in 1987 Global Reach Public since 1993 (Nasdaq: CREE) Headquartered in Durham, NC Global Reach 11 Major Locations 3,200 Employees Fiscal 2009 Revenues $567M

Cree LED Businesses Market Opportunity LED Lighting Lead the market & accelerate adoption Create demand/pull for LED lighting LED Components Drive Revenue Enable the market with “lighting-class” LEDs LED Chips Technology to enable components LED Components LED Chips Materials pg. 4

Cree Mission Lead the LED Lighting Revolution and obsolete energy-inefficient light bulbs pg. 5

It’s Happening Faster Than You May Think… Global General Illumination Market** Revenue (Billions) Conventional Lighting LED Lighting ** Source: Philips Lighting

…A Brief History of Lighting 1901 Fluorescent Tube ~1990 “High Brightness” Red, Orange, Yellow, & Green LEDs 2000 White LED Lamp demonstrates Incandescent Efficacy (17 lm/W) 2009 Production White LED Lamp Exceeds 100 lm/W 1879 Edison Light Bulb 1919 Sodium Vapor Lamp 1970s First Red LED 2005 White LED Lamp demonstrates Fluorescent Efficacy (70 lm/W) 1995 “High Brightness” Blue, Green LEDs U.S. 223,898 Monochrome signs Calculators and Indicators Full Color Signs Solid State Lighting Current lighting technology is over 120 years old LEDs began as just indicators, but are now poised to become the most efficient light source ever created

Brief History of LEDs 1955 – RCA reports IR emission using GaAs 1961 – TI gets patent for IR LED 1962 – GE develops first visible LED 1968 – Monsanto develops first commercially available LEDs for HP35 calculator 1970’s - GaP-based red, green and yellow 1980’s – AlGaAs/AlInGaP red and amber LEDs 1990’s – InGaN LEDs and YaG phosphor 2000’s – White LEDs for SSL

Basic Advantages of LED Light LEDs are…very energy efficient  >100LPW (near-term roadmap to >150LPW…) Are directional  No wasted light, any pattern possible Have very long lifetime  >50,000 hours to 70% Lumen Maintenance (L70) Are inherently rugged  No filament to break Start instantly  nanoseconds vs. > 10 min re-strike (HID) Are environmentally sound  no Hg, Pb, heavy metals Are infinitely dimmable, controllable  New lighting features, power savings Love cold temperatures  No cold starting issues

Effects of Mercury on the Environment Forever.* One teaspoon of mercury can contaminate a 20 acre lake. . Each year, an estimated 600 million fluorescent lamps are disposed of in U.S. landfills amounting to 30,000 pounds of mercury waste.* The mercury from one fluorescent bulb can pollute 6,000 gallons of water beyond safe drinking levels.* * www.lightbulbrecycling.com

LED Technology LED Chip Phosphor system Package Determines raw brightness and efficacy Phosphor system Determines color point and color point stability Package Protects the chip and phosphor Helps with light and heat extraction Primary in determining LED lifetime

Current LED Lighting Applications Lumens LPW Lumens/$

Why LED Lighting? The widespread use of LEDs over the next 10 years can: Save energy (Good) Save money Help protect the environment (Green) LED lighting can reduce electricity needs for lighting by more than 60%

Why LED Lighting? Lighting 22% US Electricity Consumption Commercial 59% Industrial 14% Residential 27% LED lighting can reduce electricity needs for lighting by more than 60%

DOE Roadmap US Department of Energy 2009 Multi-Year Plan for SSL Cree cool white production Cree warm white production US Department of Energy 2009 Multi-Year Plan for SSL

Haitz’s Law

How the Roadmap Really Works: Chip Improvement 150 Next Generation LF @ 350mA (lumens) 100 Current Generation 50 Last Generation Time Major leaps forward on LF depends on major chip improvements Incremental chip improvements, phosphor efficiency, and learning curve historically improves 1-2 LF bins as well

LED Performance Continues To Increase Light Source Efficiency Trends ? yrs 186 LPW 131 LPW R&D Announcement LED 161 LPW ~2 yrs 3 yrs XP-G HID XP-E Linear Fluorescent CW Lumens/watt High Volume Production XR-E XR-E CFL Incandescent pg. 18