This arrangement has come about after the company recently singed a new agreement with Huizhou Municipal Government and there has been an initial investment of $50 million (£29 million).
The plant will be based in Huizhou, Guangdong Province in south China and production will commence by mid 2010.
Chuck Swoboda, chairman and chief executive officer at Cree, said: "This investment enables us to expand our presence in China and demonstrates our commitment to serving the growing demands of both our local and global LED customers."
He added that the firm is looking forward to driving "the LED lighting revolution".
In related news, Jinyoung recently claimed that its new Programmable Signs will set a new industry standard because they are of such high-quality.
