By LAWRENCE M. FISHER

            Coming soon, to a chip near you, your own genes.
        The biotechnology industry, which has long lived in the
        shadow of Silicon Valley and envied its many
        overnight successes, is now tapping into that same
        technology in a bid to speed up its own growth
        significantly.

        These biochips look like the
        integrated circuits in a personal
        computer, but instead of containing
        tiny semiconductors, they are loaded
        with bits of actual DNA that make
        up genes or fragments of genes.
        Inserted in a PC-sized analytical
        instrument, the chips allow scientists to perform
        thousands of biochemical experiments at a fraction of
        the cost and time required for traditional tests.

        "This is a basic tool for change in the laboratory," said
        Michael R. Knapp, vice president for science and
        technology at Caliper Technologies in Mountain View,
        Calif. "We have been operating with the test-tube
        paradigm for basically as long as anybody has been
        doing anything."

        Biochips, or microarrays, as they are also known, will
        bring genomics, the study of all the genes in a living
        organism, out of the research laboratory and into the
        daily practice of medicine. If genomics delivers on its
        promise, health care will shift from a focus on
        detection and treatment to a process of prediction and
        prevention. Fortunes will be made.

        The initial market for biochips has been in drug
        discovery, and the major customers have been the large
        drug companies. By analyzing the subtle changes in
        genes when a cell becomes cancerous or is infiltrated
        by a virus, scientists at these companies search for new
        molecular targets for drugs. This needle-in-a-haystack
        process could take many years using test tubes and petri
        dishes but is accelerated a thousandfold by biochip
        technology.

        The market for biochemical research instruments is in
        the billions, and the transformational power of biochips
        has not gone unnoticed by the stock market. Shares in
        Affymetrix, the pioneering company in biochips, have
        risen more than fivefold the last year, giving the
        company a market value of about $3.08 billion. Other
        public companies in the field have had similar gains.

        But the biochip makers are now chasing a bigger
        opportunity: personal genomics. Even as the public and
        private efforts to spell out the three billion biochemical
        letters that make up the human genetic code race to a
        conclusion, the biochip companies say they will bring
        genomics to an affordable desktop system that could be
        deployed in clinics and physicians' offices.
        Sophisticated genetic analysis could be performed at
        the individual level, making possible early prediction
        or detection of disease, more accurate diagnosis and
        customized therapy.

        Originally the province of a handful of start-ups backed
        by venture capital and operating in a sort of gray area
        between Silicon Valley and the biotech world, the
        biochip market has lately attracted the attention of
        major electronics companies like Motorola,
        Hewlett-Packard, Texas Instruments and I.B.M., all of
        which have chips in development. Motorola's recent
        advertisements promote the company's "digital DNA,"
        while those of Hewlett-Packard proclaim the "DNA of
        Silicon Valley." The message may be metaphoric, but
        the market is very real.

        "The biochip space lies at the intersection between
        high-technology chip manufacturing, signal processing,
        software skills and more traditional molecular biology
        and genomics," said Nick Naclerio, vice president and
        general manager for Motorola's biochip systems
        division. "So it seemed right for Motorola to get
        involved in what we think will ultimately be a big
        business."

        The biochip companies are one of three new industries
        that piggybacked on the human genome project, the
        multinational decade-old effort to identify the 100,000
        or more genes -- made from the three billion letters or
        base pairs of nucleotides -- that inform every aspect of
        human biology. That project is expected to be
        completed within a year or two, either by the national
        labs or private companies or, as seems most likely, a
        combination of the two.

        Genomics companies like Human Genome Sciences,
        Millennium Pharmaceuticals, Incyte Pharmaceuticals
        and the Celera Genomics Group of the PE Corporation
        rushed to beat the public effort by finding and patenting
        genes of medical utility. Bioinformatics companies,
        like DoubleTwist.com and Informax, offer software to
        interpret genomic data. The chip companies, led by
        Affymetrix, based in Santa Clara, Calif., offer a tool to
        automate the arduous lab work of biochemical research
        -- and maybe to do much more.

        "We're going to burn a set of chips with the whole
        human genome," said Stephen P. A. Fodor, president
        and chief executive of Affymetrix. Dr. Fodor headed a
        group that pioneered the field of biochips, with a 1991
        paper in the journal Science describing how
        photolithography, the standard process by which
        semiconductor companies etch circuits in silicon, could
        also be used to synthesize biological materials on a
        chip.

        Companies like Eli Lilly, SmithKline Beecham and
        American Home Products have been eagerly buying
        Affymetrix's GeneChip arrays, helping to increase the
        company's revenues in the first nine months of this year
        to $65.7 million, from $35.8 million in the comparable
        period a year earlier.

        Often lost in the excitement about the completion of the
        genome project is that the first human genome will be a
        consensus, culled from the DNA samples of dozens of
        anonymous donors. The sequence of each gene will be
        arrived at only after billions of taxpayer dollars and a
        decade of study in laboratories lined with $300,000
        gene-sequencing machines and other elaborate devices.
        What the makers of biochips promise is to offer that
        same depth of information at the individual level and at
        low cost.

        "As soon as the reference DNA is out there, this will
        move in a thousand different directions," Dr. Fodor
        said.

        Nevertheless, most of the chip companies agree that the
        next big application will be the interpretation of how
        genetic diversity affects the efficacy and side effects of
        drugs, a field known as pharmacogenetics. The idea is
        to use the chips to spot genetic differences known as
        single nucleotide polymorphisms, or SNP's
        (pronounced SNIPS), because they consist of a
        misspelling of just one letter of the genetic code.

                              A typical person has
                              thousands of SNP's, most of
                              which are inconsequential,
                              but some can predispose one
                              to a disease, or to adverse
                              drug reactions. As
                              researchers discover new
                              SNP's every day, "SNP's on
        Chips" has become a rallying cry for the biochip
        industry.

        "If this SNP enterprise becomes what people think it
        might, you can imagine having an infant tested at birth
        and given a chip, and a result that says you are
        susceptible to diseases A, B and C," said Mark Schena,
        who did early research on biochips while studying at
        Stanford and is now a visiting scholar at TeleChem
        International, a biochip company in Sunnyvale, Calif.
        "Based on this knowledge you can make appropriate
        lifestyle changes to prevent the disease or delay its
        onset"

        Such testing, of course, raises many ethical question.
        Biochip companies are working on encryption
        technology to keep such data private, but most industry
        executives believe that legislation will be necessary.

        Because the chip companies are all chasing similar
        markets -- and in part because Affymetrix's early lead
        allowed it to lock up patents on many of the ways to put
        DNA on chips -- they are distinguishing their offerings
        by using different technologies.

        Some, like Caliper and Orchid Biocomputer have
        added microfluidics, a complex network of tiny valves
        and capillaries that allow researchers to move liquids
        on and off the chip. Nanogen, based in San Diego,
        incorporates both microfluidics and electronic circuitry
        on its chip, to allow researchers to create their own
        custom microarrays. And Aclara Biosciences of
        Mountain View, Calif., uses plastic cards instead of
        glass chips or silicon chips, to keep its devices cheap
        and disposable.

        Orchid, based in Princeton, N.J., has been chosen to
        perform testing on genetic markers identified by the
        SNP Consortium, a group of 10 pharmaceuticals
        companies and 5 academic centers, which expects to
        find and publish 300,000 SNP's the next two years.
        Next year, Orchid plans to start GeneShield.com, a
        Web-based business that will allow consumers to send
        their own DNA samples, gathered with a simple cheek
        swab, for analysis against chips loaded with reference
        SNP's associated with known diseases or drug
        interactions.

        "The number of SNP's being scored now is a
        horrendous Moore's Law," said Dale Pfost, Orchid's
        president and chief executive, referring to the
        observation by the Intel co-founder Gordon Moore that
        the number of devices on a chip would double every 18
        months. "Genetic diversity is a whole new industry that
        people don't know exists," Dr. Pfost said. "We're
        enabling that industry."

        As biochips move from the research laboratory to the
        clinic, the technology must not only achieve something
        approaching absolute accuracy but also far higher
        levels of what the industry calls throughput, meaning
        the number of tests that can be conducted rapidly or
        simultaneously.

        Indeed, evaluating the 300,000 SNP's promised by the
        consortium in 1,000 people would mean performing
        300 million different tests, and any single mistake might
        create a serious health risk. "You need an industrial
        technology for that," said Hubert Koster, the chief
        executive of Sequenom, a San Diego biochip company.
        "You cannot use a technology that is 99.9 percent
        accurate. In the research world that would be O.K., but
        not in the industrial world because it would give you
        300,000 errors."

        The next step will be even more challenging.

        If biochips are also to aid in quick diagnosis of
        disease, they need the ability to follow the trail from a
        gene, which instructs a cell to make a given protein, to
        the actual proteins produced within the body.

        Unfortunately, proteins are harder to label and measure
        then the DNA itself.

        "The proteins are the molecular equivalent of a
        symptom, and your proteins get altered long before you
        go to a doctor," said William Rich, president and chief
        executive of Ciphergen Biosystems in Palo Alto, Calif.,
        which has developed a protein chip and associated
        instruments. "We think the impact on diagnostics will
        be huge."

        Dr. Schena at TeleChem International agrees.
        "Biochips started out with a lot of diagnostics but sort
        of drifted away from that as reality set in and the
        pharmaceuticals industry was so needy," he said. "But
        it will come back. If so, the market is probably in
        excess of $10 billion a year."

        Some biochip companies are looking well beyond
        medical applications: genetic diversity also accounts
        for people's different perceptions of taste and smell.
        Indeed, Affymetrix already counts a candy manufacturer
        and a cosmetics company among its customers.

        "If you look at a map of the genome, what you see are
        markers for dysfunction," Dr. Fodor said. "It's a real
        marketing failure. Let's look at new applications like
        fragrance or taste. There are going to be a lot of fun
        things."