The laboratory is shrinking. Scientists and engineers are borrowing miniaturization, integration, and parallel-processing techniques from the computer industry to develop laboratory devices and procedures that will fit on a wafer or microchip. A growing number of companies and investors are betting that the technology will revolutionize drug development, genomics, environmental monitoring, forensics, and clinical diagnostics, in much the same way the microprocessor transformed the computer industry.

A few years hence, doctors may use biochips covered with DNA probes to determine-within minutes-a patient's ability to metabolize a given drug to determine the ideal course of therapy. Pharmaceutical companies will use arrays of microfabricated devices to synthesize and screen tens of thousands of drug candidates in a single day. Ultimately, people may wake up each morning and check their cholesterol levels on personal diagnostic devices.

"The future is really small," says Ken Nussbacher, executive vice president of Santa Clara, Calif.-based Affymetrix Inc.,...

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