June 26, 2006 – Cree Inc., Durham, NC, has agreed to acquire privately held Intrinsic Semiconductor Corp., a developer of SiC substrates, for $46 million in a move to accelerate its development of larger-diameter SiC wafers for use in high-power semiconductor devices and LEDs.

Intrinsic has developed zero micropipe SiC substrates using a proprietary “ZMP” technology, which combined with Cree’s technology and manufacturing capabilities will accelerate commercialization of 100-150mm substrates for the company’s roadmap of LEDs, as well as high-power devices in applications such as automotive, noted Chuck Swoboda, Cree’s chairman and CEO.

“The contribution of Intrinsic’s ZMP process to Cree’s existing world-class SiC technology and high-volume manufacturing capability represents a unique opportunity to make a new generation of cost-effective SiC devices available sooner than had previously been envisioned,” stated Cengiz Balkas, president & CEO of Intrinsic.

Under terms of the deal, Cree will purchase all outstanding Intrinsic stock and options for $46 million, with approximately $43.5 million of that in cash. The remainder will be paid through assumption of outstanding stock options. Cree also will incur approximately $325,000 in nonrecurring costs. The transaction should be completed within the next month, and is not expected to have a material impact upon Cree’s fiscal 2007 earnings.