WASHINGTON, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT
                    PURSUANT TO SECTION 13 OR 15(D) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                      Date of Report: September 21, 1998

                             CREE RESEARCH, INC.
            (Exact name of Registrant as Specified in its Charter)

<S>                                          <C>                              <C>       
     North Carolina                          0-21154                          56-1572719
(State or other Jurisdiction of      (Commission File Number)       (IRS Employer Identification No.)
Incorporation or Organization)

                   4600 Silicon Drive                      
                 Durham, North Carolina                         27703
        (Address of principal executive offices)             (Zip Code)
      Registrant's telephone number, including area code: (919) 361-5709


 (a)  Previous Independent Accountants

 (i)  On September 21, 1998, the Company engaged Ernst & Young LLP as its
      independent accountants for the fiscal year ending June 27, 1999.
      PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), which had served as
      the Company's independent accountant in prior fiscal years, was dismissed
      by the Company on the same date.

 (ii) The reports of PricewaterhouseCoopers on the financial statements of the
      Company for the past two fiscal years ended June 30, 1997 and June 28,
      1998 contained no adverse opinion or disclaimer of opinion and were not
      qualified or modified as to uncertainty, audit scope or accounting

(iii) The Audit Committee of the Company's Board of Directors recommended the
      change of independent accountants to the Company's Board of Directors,
      which recommendation was approved by the Board of Directors.


 (iv) In connection with its audits for the two most recent fiscal years and
      through the date of its dismissal, there were no disagreements with
      PricewaterhouseCoopers on any matter of accounting principles or
      practices, financial statement disclosure, or auditing scope or procedure
      which disagreements, if not resolved to the satisfaction of
      PricewaterhouseCoopers, would have caused it to make reference to the
      subject matter of the disagreement in connection with its report on the
      financial statements of the company for such periods.

 (v)  During the two most recent fiscal years and through the date of its
      dismissal, there were no "reportable events," as that term is defined in
      Item 304(a)(1)(v) of Regulation S-K, with respect to the services provided
      by PricewaterhouseCoopers.

      The Company has requested that PricewaterhouseCoopers furnish it with a
letter addressed to the Commission stating whether it agrees with the above
statements and, if not, stating the respects in which it does not agree. A copy
of such letter, dated September 23, 1998, is filed as Exhibit 16 of this Form

(b)  New Independent Accountants

      During the two most recent fiscal years of the Company and through the
date of the engagement of such firm, the Company did not consult with Ernst &
Young LLP on matters (i) regarding the application of accounting principles to a
specified transaction or the type of audit opinion that might be rendered on the
Company's financial statements, or (ii) which concerned the subject matter of a
disagreement or reportable event with the former auditor (as described in
Regulation S-K, Item 304).


      Exhibit 16. Letter from PricewaterhouseCoopers LLP to the Commission
                  dated September 23, 1998.


      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                               CREE RESEARCH, INC.

                                    By: /s/ Cynthia B. Merrell
                                          Cynthia B. Merrell
                                          Chief Financial Officer

Date: September 25, 1998