AFFX Affymetrix, Inc.

Item 1.01 Entry into a Material Definitive Agreement

On January 9, 2008, Affymetrix, Inc. and Illumina, Inc. entered into a settlement agreement relating to certain patent litigation between the parties.  Under the terms of the settlement, Illumina agreed, without admitting liability, to make a one-time payment to Affymetrix of $90 million.  Affymetrix agreed to dismiss with prejudice all lawsuits it had brought against Illumina.  Illumina agreed to dismiss with prejudice its counterclaims in the relevant lawsuits.  In exchange for the payment, Affymetrix granted to Illumina a perpetual covenant not to sue Illumina, its affiliates and their customers under any and all Affymetrix patents and patent applications for making, using or selling any of Illumina’s current products, products in development, and evolutions of those products and related services.  In addition, Affymetrix granted to Illumina a covenant not to sue Illumina, its affiliates and customers for four years for making, using or selling products or services of Illumina that are based on future technology developments.  These covenants not to sue cover all fields other than photolithography, the process by which Affymetrix manufactures its arrays and a field in which Illumina does not currently operate.  Payment of the settlement amount will be made once the lawsuits have been formally dismissed by the courts.

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