FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL OMB Number: 3235-0287 Expires: January 31, 2005 Estimated average burden hours per response... 0.5

(Print or Type Responses)

1. Name and Address of Reporting Person * PALMOUR JOHN W   2. Issuer Name and Ticker or Trading Symbol CREE INC [CREE] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) EXECUTIVE VICE PRESIDENT (Last) (First) (Middle) C/O CREE, INC., 4600 SILICON DRIVE 3. Date of Earliest Transaction (Month/Day/Year) 02/08/2008 (Street) DURHAM, NC 27703 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price COMMON STOCK 02/08/2008   M   4,080 A $ 3.8125 738,869 D   COMMON STOCK 02/08/2008   S(1)   5,114 D $ 32 733,755 D   COMMON STOCK 02/08/2008   S(1)   513 D $ 32.01 733,242 D   COMMON STOCK 02/08/2008   S(1)   824 D $ 32.02 732,418 D   COMMON STOCK 02/08/2008   S(1)   435 D $ 32.05 731,983 D   COMMON STOCK 02/08/2008   S(1)   47 D $ 32.06 731,936 D   COMMON STOCK 02/08/2008   S(1)   47 D $ 32.065 731,889 D   COMMON STOCK 02/08/2008   S(1)   591 D $ 32.07 731,298 D   COMMON STOCK 02/08/2008   S(1)   403 D $ 32.08 730,895 D   COMMON STOCK 02/08/2008   S(1)   186 D $ 32.1 730,709 D (2)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
	Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.		SEC 1474 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

NONQUALIFIED STOCK OPTION (RIGHT TO BUY)

$ 3.8125

02/08/2008

M

4,080

07/01/1999(3)

07/01/2008

COMMON STOCK

4,080

$ 0

0

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
PALMOUR JOHN W C/O CREE, INC. 4600 SILICON DRIVE DURHAM, NC 27703	X		EXECUTIVE VICE PRESIDENT

Signatures

John W. Palmour		02/12/2008
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	The sales reported on this Form 4 were effected pursuant to a Rule 10b5-1 trading plan adopted by Dr. Palmour on May 12, 2006 and modified on August 22, 2007.
(2)	Of the 730,709 shares reported, 690,709 are held by Dr. Palmour directly and 40,000 shares are held indirectly by Dr. Palmour's spouse.
(3)	The option vested and became exercisable as to 12,000 shares on July 1, 1999 and as to 60,000 shares on each of July 1, 2000 and July 1, 2001.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.