The vast majority of toolkit companies are based on technologies that are so narrowly based and vulnerable to commoditization that they have no chance of long-term survival. As a result, one strategy is to become broadly based and at the same time move downstream into product development - strategies followed in different ways by both Millennium Pharmaceuticals Inc. (MLNM, Cambridge, Mass.) and Human Genome Sciences Inc. (HGSI, Rockville, Md.).

But Affymetrix Inc.'s DNA chip business appears to be a niche that is deep, proprietary, long-lived, more immune to commoditization than technologies such as combinatorial chemistry, and one that can be expanded into new markets. Thus AFFX feels that it can successfully follow a strategy of going deep rather than broad, while expanding into new markets, specifically diagnostics.