10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM          TO          .

COMMISSION FILE NO. 0-28218

AFFYMETRIX, INC.

(Exact name of Registrant as specified in its charter)

DELAWARE	77-0319159
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
3420 CENTRAL EXPRESSWAY
SANTA CLARA, CALIFORNIA 95051
(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (408) 731-5000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

COMMON SHARES OUTSTANDING ON JULY 31, 2014: 73,381,698

AFFYMETRIX, INC.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets at June 30, 2014 and December 31, 2013	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2014 and 2013	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II. OTHER INFORMATION		30
Item 1.	Legal Proceedings	30
Item1A.	Risk Factors	30
Item 2.	Mine Safety Disclosures	30
Item 3.	Other Information	30
Item 4.	Exhibits	30
SIGNATURES		31

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AFFYMETRIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30, 2014			December 31, 2013
	(Unaudited)			(Note 1)
ASSETS:
Current assets:
Cash and cash equivalents	$	51,500		$	57,128
Accounts receivable, net	49,631			50,862
Inventories—short-term portion	54,043			58,059
Deferred tax assets—short-term portion	1,613			767
Prepaid expenses and other current assets	6,567			8,920
Total current assets	163,354			175,736
Property and equipment, net	16,906			18,671
Inventories—long-term portion	6,001			5,972
Goodwill	161,201			161,595
Intangible assets, net	119,814			131,108
Deferred tax assets—long-term portion	368			355
Other long-term assets	10,583			11,074
Total assets	$	478,227		$	504,511
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable and accrued liabilities	$	42,891		$	45,534
Current portion of long-term debt	4,000			12,750
Deferred revenue—short-term portion	12,681			18,660
Total current liabilities	59,572			76,944
Deferred revenue—long-term portion	2,670			2,824
Convertible notes	105,000			105,000
Term loan—long-term portion	20,950			26,700
Other long-term liabilities	21,182			21,496
Total liabilities	209,374			232,964
Stockholders’ equity:
Common stock	732			723
Additional paid-in capital	776,390			768,149
Accumulated other comprehensive income	8,833			8,392
Accumulated deficit	(517,102		)	(505,717		)
Total stockholders’ equity	268,853			271,547
Total liabilities and stockholders’ equity	$	478,227		$	504,511

See accompanying Notes to the Condensed Consolidated Financial Statements

3

AFFYMETRIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2014			2013			2014			2013
REVENUE:
Product sales	$	75,880		$	74,170		$	149,576		$	145,728
Services and other	9,552			5,294			18,827			11,681
Total revenue	85,432			79,464			168,403			157,409
COSTS AND EXPENSES:
Cost of product sales	30,560			33,587			60,071			68,021
Cost of services and other	6,028			3,706			12,932			7,213
Research and development	12,882			11,959			24,517			24,207
Selling, general and administrative	36,266			33,518			74,828			68,638
Litigation settlement	—			—			5,100			—
Restructuring charges	—			(355		)	—			4,487
Total costs and expenses	85,736			82,415			177,448			172,566
Loss from operations	(304		)	(2,951		)	(9,045		)	(15,157		)
Interest income and other, net	1,418			89			1,711			432
Interest expense	1,623			2,724			3,377			5,622
Loss before income taxes	(509		)	(5,586		)	(10,711		)	(20,347		)
Income tax provision	402			521			674			1,196
Net loss	$	(911	)	$	(6,107	)	$	(11,385	)	$	(21,543	)
Basic and diluted net loss per common share	$	(0.01	)	$	(0.09	)	$	(0.16	)	$	(0.30	)
Shares used in computing basic and diluted net loss per common share	72,944			71,154			72,722			71,038

See accompanying Notes to the Condensed Consolidated Financial Statements

4

AFFYMETRIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2014			2013			2014			2013
Net loss	$	(911	)	$	(6,107	)	$	(11,385	)	$	(21,543	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(609		)	1,268			(458		)	(1,856		)
Unrealized change in available-for-sale and non-marketable securities (net of tax of $(545) and $256 for the three and six months ended June 30, 2014, respectively)	(898		)	(55		)	421			(331		)
Unrealized change in cash flow hedges	181			(361		)	478			727
Net change in other comprehensive (loss) income, net of tax	(1,326		)	852			441			(1,460		)
Comprehensive loss	$	(2,237	)	$	(5,255	)	$	(10,944	)	$	(23,003	)

See accompanying Notes to the Condensed Consolidated Financial Statements

5

AFFYMETRIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,385	)	$	(21,543	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	16,521			20,427
Amortization of inventory step-up in fair value	4,666			9,084
Share-based compensation	6,272			3,110
Deferred tax, net	(570		)	—
Gain on sales of available-for-sale securities	(1,240		)	(50		)
Other non-cash transactions	356			529
Changes in operating assets and liabilities:
Accounts receivable, net	1,339			6,253
Inventories	(1,207		)	(1,128		)
Prepaid expenses and other assets	1,883			1,704
Accounts payable and accrued liabilities	(2,599		)	(5,796		)
Deferred revenue	(6,136		)	10,783
Other long-term liabilities	(266		)	(1,661		)
Net cash provided by operating activities	7,634			21,712
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of available-for-sale securities	2,162			9,364
Proceeds on sale of fixed assets	106			—
Capital expenditures	(3,036		)	(2,271		)
Purchase of non-marketable investment	—			(200		)
Purchase of technology rights	—			(440		)
Net cash (used in) provided by investing activities	(768		)	6,453
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock, net	1,978			521
Repayments of long term debt	(14,500		)	(6,376		)
Bond and loan issuance costs	—			(228		)
Repurchase of 3.50% senior convertible notes	—			(3,855		)
Net cash used in financing activities	(12,522		)	(9,938		)
Effect of exchange rate changes on cash and cash equivalents	28			(224		)
Net increase in cash and cash equivalents	(5,628		)	18,003
Cash and cash equivalents at beginning of period	57,128			25,671
Cash and cash equivalents at end of period	$	51,500		$	43,674

See accompanying Notes to the Condensed Consolidated Financial Statements

6

AFFYMETRIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

(UNAUDITED)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of Affymetrix, Inc. and its wholly-owned subsidiaries (“Affymetrix” or the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments, consisting of normal recurring entries, considered necessary for a fair presentation have been included.

Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited financial statements should be read in conjunction with the Company's audited financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, from which the balance sheet information as of that date and as included herein was derived.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net loss and other comprehensive income (loss) (“OCI”). OCI includes foreign currency translation adjustments, unrealized gains and losses on the Company's non-marketable securities that are excluded from net loss and unrealized gains and losses on cash flow hedges. Total comprehensive loss has been disclosed in the Company's Condensed Consolidated Statements of Comprehensive Loss.

The following table summarizes the amounts reclassified out of accumulated other comprehensive income, net of tax, for the six months ended June 30, 2014 (in thousands):

	December 31, 2013			(Decrease)/ Increase					Reclassification Adjustments			June 30, 2014
Foreign currency translation adjustment	$	7,784		$	(458	)			$	—		$	7,326
Unrealized change in non-marketable securities	1,373			421			(1	)	—			1,794
Unrealized change in cash flow hedges	(765		)	1,253					(775		)	(287		)
Total accumulated other comprehensive income, net of tax	$	8,392		$	1,216				$	(775	)	$	8,833

(1) Amounts of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, were not material except for the increase in unrealized gain in non-marketable securities that is net of a $0.5 million income tax expense.

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Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09) to provide guidance on revenue recognition. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company in the first quarter of 2017. Early adoption is not permitted. Upon adoption, ASU 2014-09 can be applied retrospectively to all periods presented or only to the most current period presented with the cumulative effect of changes reflected in the opening balance of retained earnings in the most current period presented. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements.

NOTE 2—FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2014 and December 31, 2013, the assets and liabilities measured at fair value consisted of the following (in thousands):

	June 30, 2014						December 31, 2013
	Fair Value Measurements Using Input Types						Fair Value Measurements Using Input Types
	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Derivative assets	$	7	$	—	$	7	$	185	$	—	$	185
Non-marketable securities	—		4,139		4,139		—		4,383		4,383
Total assets	$	7	$	4,139	$	4,146	$	185	$	4,383	$	4,568
Liabilities:
Derivatives liabilities	$	318	$	—	$	318	$	938	$	—	$	938

Derivative financial instruments

The Company's derivative financial instruments are measured at fair value on a recurring basis utilizing Level 2 inputs as determined based on review of third-party sources. The fair value of the Company's derivative assets and liabilities is determined based on the estimated consideration the Company would pay or receive to terminate these agreements on the reporting date. The derivative assets and liabilities are located in Prepaid expenses and other current assets and Accounts payable and accrued expenses, respectively, in the accompanying Condensed Consolidated Balance Sheets.

Non-Marketable Securities

The Company believes the carrying amounts of its non-marketable securities approximated their fair values at the dates presented above. These non-marketable securities consist of an investment in a limited partnership investment fund that invests in companies in the life science industry and are located in the United States. The investments were initially valued at purchase price and subsequently on the basis of inputs that market participants would use in pricing such investments. The portfolio of investments includes Level 1 publicly-traded equity securities and Level 3 equity securities and notes.

During the year ended December 31, 2013, other-than-temporary impairment charges of $0.5 million were recognized on the Company's non-marketable securities. There was no other-than-temporary impairment during the six months ended June 30, 2014. Net investment losses are included in Interest income and other, net in the accompanying Consolidated Statements of Operations. Depending on market conditions, the Company may incur additional charges on this investment in the future.

8

The following table summarizes the change in the fair value of the Company's non-marketable securities during the six months ended June 30, 2014 (in thousands).

Balance as of December 31, 2013	$	4,383
Sales	(2,162		)
Realized gain (loss)	1,240
Unrealized gain (loss)	678
Balance as of June 30, 2014	$	4,139

Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-term debt obligations as discussed in Note 7, "Long-Term Debt Obligations", are not measured at fair value on a recurring basis and are carried at amortized cost. The Company believes the fair values of the Term Loan approximates its carrying values, or amortized cost, due to the short-term nature of these obligations and the market rates of interest rates they bear. Such inputs are classified as Level 3 of the fair value hierarchy. The fair value of the Company’s 4.00% Notes is based on quoted market prices as of the respective balance sheet date, and therefore is classified as Level 1 of the fair value hierarchy. As of June 30, 2014, the fair value of the Company’s 4.00% Notes was approximately $180.7 million.

NOTE 3—DERIVATIVE FINANCIAL INSTRUMENTS

The Company derives a portion of its revenues in foreign currencies, predominantly in Europe and Japan, as part of its ongoing business operations. In addition, a portion of its assets are held in the foreign currencies of its subsidiaries. The Company enters into foreign currency forward contracts to manage a portion of the volatility related to transactions that are denominated in foreign currencies. The Company’s foreign currency forward contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions that are independent of those exposures. The Company’s accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company records all derivatives on the accompanying Condensed Consolidated Balance Sheets at fair value. The effective portions of designated cash flow hedges are recorded in OCI until the hedged item is recognized in operations. As of June 30, 2014, the Company’s existing foreign currency forward exchange contracts mature within 12 months. The deferred amount related to the Company’s derivatives recorded in OCI at June 30, 2014, and expected to be recognized into earnings over the next 12 months is a net loss of $0.3 million. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through operations.

Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in association with such derivative instruments are reclassified immediately into operations through Interest income and other, net on the Condensed Consolidated Statement of Operations. Any subsequent changes in fair value of such derivative instruments are reflected in Interest income and other, net unless they are re-designated as hedges of other transactions. The Company recognized less than $0.1 million related to the loss of hedge designation on cash flow hedges related to the Euro that were deemed ineffective due to lower-than-forecasted revenue from Europe for the six months ended June 30, 2014. No additional hedges are deemed ineffective as of June 30, 2014. During the six months ended June 30, 2013, the Company recognized $0.1 million in net gains in Interest income and other, net, related to the loss of hedge designation on a portion of cash flow hedges related to the Japanese yen that were deemed ineffective due to lower-than-forecasted revenue from Japan.

Under the Credit Agreement as defined in Note 7, "Long-Term Debt Obligations", the Company is required to maintain derivative contracts to protect against fluctuations in interest rates with respect to at least 35% of the aggregate principal amount of the Term Loan then outstanding, with such derivative contracts being required to have at least a three-year term. Accordingly, the Company maintains an interest rate swap (the "Interest Rate Swap") to comply with the requirements of the Credit Agreement. The Interest Rate Swap calls for fixed rate quarterly payments of 0.61% of the notional amount in exchange for a variable rate quarterly receipt equal to a 3-month LIBOR rate. The Interest Rate Swap terminates on June 25, 2015.

The Company did not designate the Interest Rate Swap as a hedging instrument and will recognize adjustments to fair value through Interest income and other, net on the accompanying Condensed Consolidated Statements of Operations at each reporting date. As of June 30, 2014, the fair value of the Interest Rate Swap was less than $0.1 million.

9

As of June 30, 2014 and December 31, 2013, the total notional values of the Company’s derivative assets and liabilities were as follows (in thousands):

	June 30, 2014		December 31, 2013
Euro	$	14,714	$	21,990
Japanese Yen	3,630		4,588
British Pound	3,925		5,653
Interest rate swap	10,307		10,307
Total	$	32,576	$	42,538

Other than the Interest Rate Swap, the Company did not have any derivative assets or liabilities that were not designated or qualifying as hedges as of June 30, 2014 and December 31, 2013.

The Company is exposed to the risk that the counterparties to its hedges may be unable to meet the terms of these agreements. To mitigate the risk, only contracts with carefully selected highly-rated major financial institutions are entered into. In the event of non-performance by these counterparties, the asset position carrying values of the financial instruments represent the maximum amount of loss that can be incurred; however, no losses as a result of counterparty defaults are expected. The Company does not require and is not required to pledge collateral for these financial instruments. The Company does not enter into foreign currency forward contracts for trading or speculative purposes and is not party to any leveraged derivative instruments.

The following table shows the Company’s foreign currency derivative measures at fair value as reflected on the accompanying Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014		December 31, 2013		Balance Sheet Classification
Derivative assets:
Foreign exchange contracts	$	7	$	185	Prepaid expenses and other current assets
Derivative liabilities:
Foreign exchange contracts	296		927		Accounts payable and accrued liabilities
Interest rate swap	22		11		Other long-term liabilities

10

The following table shows the effect, net of tax, of the Company’s derivative instruments on the accompanying Condensed Consolidated Statements of Operations and OCI for the three and sixmonths endedJune 30, 2014and 2013 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Derivatives in cash flow hedging relationships:
Net (loss) gain recognized in OCI, net of tax (1)	$	(181	)	$	(361	)	$	(478	)	$	725
Net (loss) gain reclassified from accumulated OCI into Revenue, net of tax (2)	(314		)	254			(758		)	1,081
Net (loss) gain reclassified from accumulated OCI into Interest income and other, net, net of tax (3)	(7		)	—			(17		)	158
Net gain recognized in Interest income and other, net, net of tax (4)	19			30			1			45
Derivatives not designated as hedging relationships:
Net gain recognized in Interest income and other, net, net of tax (5)	11			4			12			147

(1) Net change in the fair value of the effective portion classified in OCI

(2) Effective portion classified as Revenue

(3) Ineffective portion classified as Interest income and other, net

(4) Amount excluded from effectiveness testing classified as Interest income and other, net

(5) Classified in Interest income and other, net

NOTE 4—STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION EXPENSE

Share-based Compensation Plans

The Company has a share-based compensation program, most recently the 2000 Amended and Restated Equity Incentive Plan (the “Plan”), that provides the Board of Directors broad discretion in creating equity incentives for employees, officers, directors and consultants. This program includes incentive and non-qualified stock options and non-vested stock awards (also known as restricted stock) granted under various stock plans. As of June 30, 2014, the Company had approximately 4.4 million shares of common stock reserved for future issuance under its share-based compensation plans. New shares are issued as a result of stock option exercises, restricted stock units vesting and restricted stock award grants.

The Company recognized share-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Costs of product sales	$	660	$	262	$	1,197	$	429
Research and development	637		202		1,144		531
Selling, general and administrative	1,830		812		3,931		2,150
Total share-based compensation expense	$	3,127	$	1,276	$	6,272	$	3,110

As of June 30, 2014, $17.8 million of total unrecognized share-based compensation expense related to non-vested awards is expected to be recognized over the respective vesting terms of each award through 2018. The weighted‑average terms of the unrecognized share-based compensation expense are 2.3 years for stock options and 2.1 years for restricted stock.

Performance-Based Awards

The Company's share-based awards program includes performance-based restricted stock awards ("PRSUs") that vest based upon the achievement of certain performance criteria and a service vesting criteria following the achievement of

11

performance criteria. Performance criteria include various operational criteria of the Company such as revenues, earnings before interest, taxes, depreciation and amortization, product launches, and similar criteria, either on a Company-wide or segment specific basis. The service vesting criteria ranges from six months to four years. The Company recognizes the fair value of these awards to the extent the achievement of the related performance criteria is estimated to be probable. If a performance criteria is subsequently determined to not be probable of achievement, any related expense is reversed in the period such determination is made. Conversely, if a performance criteria is not currently expected to be achieved but is later determined to be probable of achievement, a “catch-up” entry is recorded in the period such determination is made for the expense that would have been recognized had the performance criteria been probable of achievement since the grant of the award.

As of June 30, 2014, there were 1,194,100 PRSUs outstanding with an average grant date fair value of $5.93 per PRSU. The Company expects that it is probable that 874,686 of these PRSUs will vest and that the related unrecognized stock compensation expense of $2.9 million will be recognized over the next 4 years. Changes in the Company’s assessment of the probability of achievement of performance criteria could have a material effect on the results of operations in future periods. There were no changes in estimate related to the probability of vesting or recognition of expense related to PRSUs during either of the periods ended June 30, 2014 or 2013.

For additional information concerning the Company's share-based compensation plans, including performance-based awards programs, see Note 13, "Stockholders' Equity and Share-Based Compensation Expense", to the consolidated financial statements in Part II, Item 8 of the Company's 2013 Annual Report on Form 10-K.

NOTE 5—INVENTORIES

At June 30, 2014 and December 31, 2013, inventories consisted of the following (in thousands):

	June 30, 2014		December 31, 2013
Raw materials	$	12,447	$	11,587
Work-in-process	17,878		22,139
Finished goods	29,719		30,305
Total	$	60,044	$	64,031
Short-term portion	$	54,043	$	58,059
Long-term portion	$	6,001	$	5,972

Amortization expense related to the fair value step-up during the six months ended June 30, 2014 and 2013 was $4.7 million and $9.1 million, respectively.

NOTE 6—WARRANTIES

The Company provides for anticipated warranty costs at the time the associated product revenue is recognized. Accrued warranties are included in accounts payable and accrued liabilities in the accompanying Condensed Consolidated Balance Sheets. Product warranty costs are estimated based upon the Company’s historical experience and the applicable warranty period. The Company periodically reviews the adequacy of its warranty reserve and adjusts, if necessary, the warranty percentage and accrual based on actual experience and estimated costs to be incurred. Changes to the Company’s product warranty liability for the six months ended June 30, 2014 are as follows (in thousands):

Balance at December 31, 2013	$	1,697
Additions charged to cost of product sales	339
Repairs and replacements	(395		)
Adjustments	(183		)
Balance at June 30, 2014	$	1,458

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NOTE 7—LONG-TERM DEBT OBLIGATIONS

The following table summarizes the carrying amount of the Company's borrowings (in thousands):

	June 30, 2014		December 31, 2013
Term loan	$	24,950	$	29,450
Revolving credit facility	—		10,000
4.00% Notes	105,000		105,000
Total debt	129,950		144,450
Less: current portion of long-term debt	4,000		12,750
Total long-term debt	$	125,950	$	131,700

Term Loan and Revolving Credit Facility

On June 25, 2012, in conjunction with the acquisition of eBioscience, Inc., the Company entered into a five year $100.0 million Senior Secured Credit Facility credit agreement (the “Credit Agreement”). The Credit Agreement provided for a Term Loan in an aggregate principal amount of $85.0 million and a revolving credit facility in an aggregate principal amount of $15.0 million.

On October 17, 2013 the Company refinanced its Senior Secured Credit Facility and entered into the Fourth Amendment to Credit Agreement (the "Fourth Amendment"). The Fourth Amendment provided, among other things, for term loan in the aggregate principal amount of $38.0 million and revolving loan commitments in the aggregate principal amount of $10.0 million, each with a term of five years. The Company borrowed a total of $38.0 million under the Term Loan and $10.0 million under the revolving loan upon refinancing. As of June 30, 2014, the applicable interest rate was approximately 4.38%.

On July 28, 2014, the Company entered into the Fifth Amendment to Credit Agreement (the "Fifth Amendment" and the Credit Agreement as so amended, the "Amended Credit Agreement"). The Fifth Amendment provides, among other things, for (1) an uncommitted incremental term loan facility in an aggregate amount not to exceed $50.0 million and (2) the reduction of interest rate margins.

At the option of the Company (subject to certain limitations), borrowings under the Amended Credit Agreement bear interest at either a base rate or at the London Interbank Offered Rate (“LIBOR”), plus, in each case, an applicable margin. Under the Base Rate Option, interest will be at the base rate plus 1.5% to 1.75% dependent on the senior leverage ratio then in effect calculated on the basis of the actual number of days elapsed in a in a year of 365 or 366 days (as applicable) and payable quarterly in arrears. The base rate will be equal to the greatest of (a) the rate last quoted by The Wall Street Journal (or another national publication described in the Amended Credit Agreement) as the U.S. “Prime Rate,” (b) the federal funds rate, plus 0.50% per annum or (c) LIBOR for an interest period of one month, plus 1.00% per annum. Under the LIBOR Option, interest will be determined based on interest periods to be selected by Affymetrix of one, two, three or six months (and, to the extent available to all relevant lenders, nine or 12 years) and will be equal to LIBOR plus 2.50% and 2.75% dependent on the senior leverage ratio then in effect, calculated based on the actual number of days elapsed in a 360-day year. Interest will be paid at the end of each interest period or in the case of interest periods longer than three months, quarterly.

The loans and other obligations under the Senior Secured Credit Facility are (i) guaranteed by substantially all of the Company’s domestic subsidiaries (subject to certain exceptions and limitations) and (ii) secured by substantially all of the assets of Affymetrix and each guarantor (subject to certain exceptions and limitations).

The Amended Credit Agreement requires the Company to maintain an interest coverage ratio of at least 3.5 to 1.0 and a senior leverage ratio not exceeding initially 1.75 to 1.00 and stepping down to 1.20 to 1.00. The Amended Credit Agreement also includes other covenants, including negative covenants that, subject to certain exceptions, limit Affymetrix’, and that of certain of its subsidiaries’, ability to, among other things: (i) incur additional debt, including guarantees by the Company or its subsidiaries, (ii) make investments, pay dividends on capital stock, redeem or repurchase capital stock, redeem or repurchase the Company’s senior convertible notes or any subordinated obligations, (iii) create liens and negative

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pledges, (iv) make capital expenditures, (v) dispose of assets, (vi) make acquisitions, (vii) create or permit restrictions on the ability of Affymetrix’ subsidiaries to pay dividends or make distributions to Affymetrix, (viii) engage in transactions with affiliates, (ix) engage in sale and leaseback transactions, (x) consolidate or merge with or into other companies or sell all or substantially all the Company’s assets and (xi) change their nature of business, their organizational documents or their accounting policies.

The Company is required to make the following mandatory prepayments: (a) annual prepayments in an amount equal to 50% of excess cash flow (as defined in the Amended Credit Agreement), subject to leverage-based step-downs, (b) prepayments in an amount equal to 100% of the net cash proceeds of issuances or incurrences of debt obligations of Affymetrix and its subsidiaries (other than debt incurrences expressly permitted by the Credit Agreement), (c) prepayments in an amount equal to 100% of the net proceeds of asset sales in excess of $2.5 million annually (subject to certain reinvestment rights) and (d) prepayments in an amount equal to any indemnification payments or similar payments received under the Acquisition Agreement, subject to certain exclusions.

The Amended Credit Agreement also contains events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-default and cross-acceleration to other indebtedness in excess of specified amounts, monetary judgment defaults in excess of specified amounts, bankruptcy or insolvency, actual or asserted invalidity or impairment of any part of the credit documentation (including the failure of any lien on a material portion of the collateral to remain perfected) and change of ownership or control defaults. In addition, the occurrence of a “fundamental change” under the indenture governing the 4.00% Notes would be an event of default under the Amended Credit Agreement. As of June 30, 2014, the Company was in compliance with the covenants.

The proceeds received on June 25, 2012 from the original Term Loan were net of debt issuance costs of approximately $4.5 million being amortized over the 5-year term of the Senior Secured Credit Facility. Following the refinancing under the Fourth Amendment, the Company wrote off unamortized debt issuance costs of $2.5 million associated with the original Term Loan, and received proceeds on October 17, 2013 from the new Term Loan and Revolver, net of debt issuance costs of approximately $0.8 million that amortize on the effective interest rate method beginning October 17, 2013.

As of June 30, 2014, the Company had an outstanding principal balance of approximately $25.0 million under the Term Loan and incurred $0.4 million and $1.0 million in interest expense under the Senior Secured Credit Facility for the three and six months ended June 30, 2014, respectively. There were no amounts outstanding under the Revolving Credit Facility as of June 30, 2014.

Quarterly, principal payments are due under the Term Loan, which amortizes such that 10% of the outstanding principal is due during the first four years and the remaining 60% is due in the fifth year, including any remaining principal balance and any outstanding revolver balance at such time. The principal amount of unpaid maturities per the Amended Credit Agreement is as follows (in thousands):

2014, remainder thereof	$	—
2015	—
2016	—
2017	2,150
2018	22,800
Total	$	24,950

The Company intends to continue making quarterly payments during 2014 and reclassified $4.0 million as current on the accompanying Condensed Consolidated Balance Sheet as of June 30, 2014.

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4.00% Convertible Senior Notes

On June 25, 2012, the Company issued $105.0 million principal amount of 4.00% Convertible Senior Notes ("4.00% Notes") due July 1, 2019. The net proceeds, after debt issuance costs totaling $3.9 million from the 4.00% Notes offering, were $101.1 million. The 4.00% Notes bear interest of 4.00% per year payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2013 until the maturity date of July 1, 2019, unless converted, redeemed or repurchased earlier. The debt issuance costs are being amortized over the effective life of the 4.00% Notes, which is 7 years.

Holders of the 4.00% Notes may convert their 4.00% Notes into shares of the Company’s stock at their option any time prior to the close of business on the business day immediately preceding the maturity date. The 4.00% Notes are initially convertible into approximately 170.0319 shares of the Company’s common stock per $1,000 principal amount of notes, which equates to 17,857,143 shares of common stock, or an initial conversion price of $5.88 per share of common stock. The conversion rate is subject to certain customary anti-dilution adjustments. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event in certain circumstances. Holders may also require the Company to repurchase for cash their notes upon certain fundamental changes.

On or after July 1, 2017, the Company can redeem for cash all or part of the 4.00% Notes if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending within 5 trading days prior to the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 4.00% Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

As of June 30, 2014, the outstanding balance on the 4.00% Notes was $105.0 million and interest incurred for the three and six months ended June 30, 2014 was $1.2 million and $2.4 million, respectively.

NOTE 8—NET LOSS PER COMMON SHARE

Basic earnings per common share is calculated using the weighted‑average number of common shares outstanding during the period less the weighted‑average shares subject to repurchase. Diluted earnings per common share, if any, gives effect to dilutive common stock subject to repurchase, stock options (calculated based on the treasury stock method), shares purchased under the employee stock purchase plan and convertible debt (calculated using an as-if-converted method).

For the three and six months ended June 30, 2014 and 2013, diluted net loss per common share is identical to basic net loss per common share due to potentially dilutive securities being excluded from the calculation, as their effect is anti-dilutive. Potentially dilutive securities excluded from diluted net loss per common share on an actual outstanding basis, were as follows (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Employee stock options	4,540	5,646	4,540	5,646
Employee stock purchase plan	89	14	45	14
Restricted stock and restricted stock units	4,336	3,887	4,336	3,887
Convertible notes	17,857	17,857	17,857	17,868
Total	26,822	27,404	26,778	27,415

NOTE 9—COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company has been in the past, and continues to be, a party to litigation, which has consumed, and may continue to consume, substantial financial and managerial resources. The Company could incur substantial costs and divert the attention of management and technical personnel in defending against litigation, and any adverse ruling or perception of an

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adverse ruling could have a material adverse impact on the Company’s stock price. In addition, any adverse ruling could have a material adverse impact on the Company’s cash flows and financial condition. The results of any litigation or any other legal proceedings are uncertain and as of the date of this report, the Company has not accrued any liability with respect to any of the litigation matters listed below:

Enzo Litigation

Southern District of New York Case: On October 28, 2003, Enzo Life Sciences, Inc., a wholly-owned subsidiary of Enzo Biochem, Inc. (collectively "Enzo"), filed a complaint against the Company that is pending in the United States District Court for the Southern District of New York for breach of contract, injunctive relief and declaratory judgment. The Enzo complaint relates to a 1998 distributorship agreement with Enzo under which the Company served as a non-exclusive distributor of certain reagent labeling kits supplied by Enzo. On November 10, 2003, the Company filed a complaint against Enzo in the United States District Court for the Southern District of New York for declaratory judgment, breach of contract and injunctive relief relating to the 1998 agreement. On April 22, 2014, the Company entered into a settlement agreement with Enzo with respect to these two lawsuits. Pursuant to the agreement the Company agreed to pay Enzo $5.1 million and recorded the litigation settlement charge within the results of operations for the six months ended June 30, 2014. The settlement agreement does not include the Delaware Case described below.

Delaware Case: On April 6, 2012, Enzo filed a complaint against the Company in the United States District Court for the District of Delaware. In the complaint, plaintiff alleges that Affymetrix is infringing U.S. Patent No. 7,064,197 by making and selling certain GeneChip® products. The plaintiff seeks a preliminary and permanent injunction enjoining the Company from further infringement and unspecified monetary damages. The Company will vigorously defend against the plaintiff’s case. No trial date is set for this action.

Administrative Proceedings

The Company’s intellectual property is subject to a number of significant administrative actions. These proceedings could result in the Company’s patent protection being significantly modified or reduced, and the incurrence of significant costs and the consumption of substantial managerial resources. For the six months ended June 30, 2014 and 2013, the Company did not incur significant costs in connection with administrative proceedings.

Leases

On June 20, 2014, the Company entered into two leases with BMR-10255 Science Center LP and BMR-10240 Science Center Drive LP, for two premises located in San Diego, California (the “Leases”). The Leases cover premises totaling approximately 82,759 rentable square feet. Subject to the completion of tenant improvements, both Leases are expected to commence in August 2015 and expire in March 2023. The Company expects to bring all employees of its eBioscience business unit in San Diego within closer proximity upon the commencement of the Leases.

Future minimum lease obligations, net of sublease income, as of June 30, 2014 under the two leases mentioned above are as follows (in thousands):

For the Year Ending December 31,	Amount
2014, remainder thereof	$	—
2015	780
2016	2,324
2017	2,393
2018	2,462
Thereafter	11,242
Total	$	19,201

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NOTE 10—INCOME TAXES

During the three and six months ended June 30, 2014, the Company recognized a provision for income taxes of $0.4 million and $0.7 million, respectively. The provision for income taxes during the three months ended June 30, 2014 primarily consists of foreign taxes, an income tax expense of $0.1 million resulting from a reduction in valuation allowance for net deferred tax assets arising from other comprehensive income recorded in accordance with intraperiod tax allocation guidance, and an income tax benefit of $0.3 million related to the lapses of statutes of limitations. The provision for income taxes during the six months ended June 30, 2014 primarily consists of foreign taxes, offset by an income tax benefit of $0.1 million resulting from a reduction in valuation allowance for net deferred tax assets arising from other comprehensive income recorded in accordance with intraperiod tax allocation guidance, and an income tax benefit of $0.3 million related to the lapses of statutes of limitations.

Due to the Company’s history of cumulative operating losses, management concluded that, after considering all the available objective evidence, it is not more likely than not that all the Company’s net deferred tax assets will be realized. Accordingly, all of the Company's U.S. deferred tax assets continue to be subject to a valuation allowance as of June 30, 2014.

As of June 30, 2014, the total amount of unrecognized tax benefits decreased by approximately $0.3 million as compared to December 31, 2013, due to the lapses of statutes of limitations. As a result of settlements of ongoing tax examinations and/or expiration of statues of limitations without the assessment of additional income taxes, the amount of unrecognized tax benefits that could be recognized in earnings in the next 12 months could range from zero to approximately $1.8 million.

NOTE 11—SEGMENT INFORMATION

The Company reports segment information on the "management" approach which designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments. The Company has determined that its Chief Executive Officer is the Company's chief operating decision maker ("CODM") as he is responsible for reviewing and approving investments in the Company's technology platforms and manufacturing infrastructure.  The Company is organized in two reportable segments: Affymetrix Core and eBioscience.

Affymetrix Core is divided into four business units, with each business unit having its own strategic Marketing and Research and Development groups to better serve customers and respond quickly to the market needs.  Affymetrix Core manufacturing operations are based on platforms that are used to produce various Affymetrix products that serve multiple applications and markets and similar customer and economic characteristics. Additionally, the business units share certain research, development and common corporate services that provide capital, infrastructure and functional support. As such, the Company has concluded that the four business units represent one reportable operating segment. The following describes the four business units that form Affymetrix Core:

• Expression: This business unit markets the Company's GeneChip® gene expression products and services;

• Genetic Analysis and Clinical Applications: This business unit markets the Company's rapidly growing Axiom® genotyping product line, as well as products with clinical diagnostic and research applications including the CytoScan® and OncoScan products, as well as the QuantiGene ViewRNA in-situ hybridization platform for clinical translational research. In addition, the business unit is responsible for development and marketing of the Powered-by-Affymetrix (PbA) clinical partnering and licensing program which enables third-party diagnostic companies to access and develop DNA and RNA-based diagnostic tests on Affymetrix technology platforms. This business unit also markets the CytoScan Dx product, the recently FDA approved microarray system for post natal diagnostics of children with developmental delays and disorders;

• Life Science Reagents: This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers and other tool provider businesses, including those developing and marketing Next Generation Sequencing products and molecular diagnostics; and

• Corporate: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from field-services provided to customers of the Company.

The eBioscience business unit operates with its own manufacturing, research and marketing groups. The eBioscience business unit does utilize certain Corporate functions such as finance, legal and human resources. This reportable

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segment specializes in the areas of flow cytometry reagents, immunoassays, microscopic imaging, other protein-based analyses, QuantiGene single and multiplex RNA solution assays (not including the QuantiGeneRNA View in-situ hybridization platform) and Procarta multiplex immunoassay product lines.

eBioscience began integrating the development and marketing of the QuantiGene (excluding the QuantiGene ViewRNA in-situ hybridization platform) and Procarta product lines during 2013 with full integration in 2014. These products were previously reported by the Expression Business Unit of the Affymetrix Core reportable segment.  Accordingly, segment information for prior periods has been restated to reflect these changes for purposes of comparability. 

The Company evaluates the performance of its reportable segments based on revenue and income (loss) from operations. Revenue is allocated to each business unit based on product codes. The eBioscience business is operated on a stand-alone basis.

The following table shows revenue and loss from operations by reportable operating segment for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue:
Affymetrix Core	$	62,085		$	57,237		$	121,532		$	113,157
eBioscience	23,347			22,227			46,871			44,252
Totals	$	85,432		$	79,464		$	168,403		$	157,409
Loss from operations:
Affymetrix Core	$	854		$	265		$	(6,734	)	$	(7,789	)
eBioscience	(1,158		)	(3,216		)	(2,311		)	(7,368		)
Totals	$	(304	)	$	(2,951	)	$	(9,045	)	$	(15,157	)

NOTE 12—RELATED PARTY TRANSACTIONS

In December 2011, the Company entered into an agreement under which it assigned one patent application and related know-how to Cellular Research, Inc. (“Cellular Research”), a company founded by the Company’s Chairman, Dr. Stephen P.A. Fodor. Dr. Fodor also owns a majority of the shares of Cellular Research. Pursuant to the agreement, Cellular Research shall pay single digit royalties to Affymetrix on sales of products covered by the assigned technology, and starting in December 2015, an annual minimum fee of $100,000. Affymetrix shall also have a right of first refusal to collaborate with Cellular Research for the development of certain new products and to supply arrays to Cellular Research under certain terms and conditions. As of June 30, 2014, no significant royalties had been earned from this agreement.

NOTE 13—RESTRUCTURING

During the fourth quarter of 2012, the Company initiated a cost reduction action that included downsizing its workforce to realign the Company's organization to support its strategy to stabilize its core business and position the Company for growth. Restructuring charges of $4.5 million were recognized during the six months endedJune 30, 2013.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations as of June 30, 2014 and for the three and six months ended June 30, 2014 and 2013 should be read in conjunction with our financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q and with the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2013.

All statements in this quarterly report that are not historical are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act as amended, including statements regarding our strategic initiatives, anticipated cost savings, return to profitability and integration of and synergies related to eBioscience, as well as all other statements regarding our "goals," "expectations," "beliefs," "intentions," "strategies" or the like. Such statements are based on our current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Actual results or business conditions may differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, our capacity to identify and capitalize upon emerging market opportunities; risks relating to our ability to acquire new businesses and technologies and successfully integrate and realize the anticipated strategic benefits and cost savings or other synergies thereof, including our acquisition of eBioscience, in a cost-effective manner while minimizing the disruption to our business; risks that eBioscience’s future performance may not be consistent with its historical performance; risks relating to our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness; risks relating to our ability to develop and successfully commercialize new products and services; uncertainties related to cost and pricing of Affymetrix products; fluctuations in overall capital spending in the academic and biotechnology sectors; changes in government funding policies; our dependence on collaborative partners; the size and structure of our current sales, technology and technical support organizations; uncertainties relating to our suppliers and manufacturing processes; risks relating to our ability to achieve and sustain higher levels of revenue, higher gross margins and reduced operating expenses; uncertainties relating to technological approaches; global credit and financial market conditions; personnel retention; uncertainties relating to the Food & Drug Administration (FDA) and other regulatory approvals; competition; risks relating to intellectual property of others and the uncertainties of patent protection and litigation; volatility of the market price of our common stock; unpredictable fluctuations in quarterly revenues; and the risk factors disclosed under Part I, Item 1A of this Annual Report on Form 10-K for the year ended December 31, 2013. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, except as required by law.

OVERVIEW

We are a provider of life science and molecular diagnostic products that enable parallel analysis of biological systems at the gene, protein and cell level. We sell our products to life science research centers, academic institutions, government and private laboratories, as well as pharmaceutical, diagnostic and biotechnology companies. Over 65,000 peer-reviewed papers have been published based on work using our products. We have approximately 1,100 employees worldwide and maintain sales and distribution operations across the United States, Europe, Latin America and Asia.

Reportable Segments

The Company reports segment information on the "management" approach which designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments. The Company has determined that its Chief Executive Officer is the Company's chief operating decision maker ("CODM") as he is responsible for reviewing and approving investments in the Company's technology platforms and manufacturing infrastructure. The Company is organized in two reportable segments: Affymetrix Core and eBioscience.

Affymetrix Core is divided into four business units, with each business unit having its own strategic Marketing and Research and Development groups to better serve customers and respond quickly to the market needs. Affymetrix Core manufacturing operations are based on platforms that are used to produce various Affymetrix products that serve multiple applications and markets. Additionally, the business units share certain research, development and common corporate services that provide capital, infrastructure and functional support, and have similar customers and economic

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characteristics. As such, the Company has concluded that the four business units represent one reportable operating segment. The following describes the four business units that form Affymetrix Core:

• Expression: This business unit markets the Company's GeneChip® gene expression products and services;

• Genetic Analysis and Clinical Applications: This business unit markets the Company's rapidly growing Axiom® genotyping product line, as well as products with clinical diagnostic and research applications including the CytoScan® Dx and OncoScan products, as well as the QuantiGene ViewRNA in-situ hybridization platform for clinical translational research. In addition, the business unit is responsible for development and marketing of the PbA clinical partnering and licensing program which enables third-party diagnostic companies to access and develop DNA and RNA-based diagnostic tests on Affymetrix technology platforms. This business unit also markets the CytoScan Dx product, the recently FDA approved microarray system for post natal diagnostics of children with developmental delays and disorders;

• Life Science Reagents: This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers and other tool provider businesses, including those developing and marketing Next Generation Sequencing products and molecular diagnostics; and

• Corporate: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from field-services provided to customers of the Company.

The eBioscience business unit operates with its own manufacturing, research and marketing groups. The eBioscience business unit does utilize certain Corporate functions such as finance, legal and human resources. This reportable segment specializes in the areas of flow cytometry reagents, immunoassays, microscopic imaging, other protein-based analyses, QuantiGene single and multiplex RNA solution assays (not including the QuantiGeneRNA View in-situ hybridization platform) and Procarta multiplex immunoassay product lines.

Effective 2014, the Genetic Analysis and Clinical Applications Business Unit market the QuantiGene ViewRNA in-situ hybridization platform for clinical translational research of RNA in tissue sections that was previously part of the Expression Business Unit. In addition, eBioscience began integrating the development and marketing of the remaining QuantiGene (excluding the QuantiGene ViewRNA in-situ hybridization platform) and Procarta product lines during 2013 with full integration in 2014. These products were also previously reported by the Expression Business Unit.  Accordingly, segment information for prior periods has been restated to reflect these changes for purposes of comparability. 

All of our business units sell their products through our Global Commercial Organization comprised of sales, field application and service support, and marketing personnel. We market and distribute our products directly to customers in North America, Japan and major European markets. In these markets, we have our own sales, service and application support personnel responsible for expanding and managing their respective customer bases. In other markets, such as Mexico, India, Brazil, the Middle East and Asia Pacific, including China, we sell our products principally, through third party distributors that specialize in life science supply. In China and Brazil, we are investing in local management, sales, service and application support. In certain of these markets we also have focused and dedicated sales, service and application support as well to increase the reach and effectiveness of our distributors. For certain molecular diagnostic and industrial applications market opportunities, we supply our PbA partners with arrays, assays, reagents and instruments, which they incorporate into diagnostic products and assume the primary commercialization responsibilities.

See Note 11, "Segment Information", of the accompanying condensed consolidated financial statements for more information on our reportable operating segments.

Overview of the second quarter of 2014 and strategic initiatives

Traditionally, a significant portion of our revenue came from the well-established gene expression business, specifically our GeneChip® Expression product line and our legacy genotyping products, and we concentrated on selling these products in the basic research market focused on discovery activities. Declining sales and intense competition from newer technologies such as next generation sequencing in the gene expression business led to decreasing gene expression revenue and our legacy genotyping products also experienced declines due to competition and shifting customer priorities.

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Since Frank Witney became our President and Chief Executive Officer in July 2011, we have begun shifting our resources and focus from a dependency on our Expression business unit products to a more diversified portfolio with broader and growing revenue streams that reach into the growing markets for translational medicine, molecular diagnostics and applied sciences.     Revenue from the Expression business unit was reduced to approximately 20% of total revenue in the second quarter of 2014 as compared to 26% in the same period of 2013 while revenue from our Genetic Analysis and Clinical Applications business unit increased to 40% of total revenue in the second quarter of 2014 as compared to 30% in the same period of 2013. Our eBioscience business was approximately 27% and 28% of our consolidated revenue for the second quarter of 2014 and 2013, respectively.

As we progress through 2014, we continue to focus on the strategy developed by Dr. Witney and the management team where we continue to stabilize our core business and position our company for growth and increasing profitability. We expect this transformation to take several years, and have categorized this plan into three phases.

• Phase 1 (2011-2012) –Portfolio Realignment. During this phase, we reorganized ourselves into business units to sharpen our business focus based on target markets. We also launched CytoScan®, our growing cytogenetic microarray product line and acquired eBioscience. Through eBioscience, we now offer flow cytometry reagents and immunoassay products which, aligned with our new product introductions, enable us to broaden our reach into the translational medicine, applied, and molecular diagnostics markets. We believe these actions have and will promote stabilization of our core business and the realignment of our product portfolio has positioned us for growth.

• Phase II (2013-2014) – Profitability, Strengthen Balance Sheet, Development of Newer Product Lines. In the beginning of 2013, we implemented a corporate restructuring with a goal of accelerating our path to profitability. Our priorities for this phase are to achieve profitability, pay down a significant portion of our senior secured debt, successfully commercialize our newer product lines (for example, CytoScan®, Axiom®, OncoScan^TM, Human Transcriptome Array and QuantiGene® View RNA lines, as well as our eBioscience products) and invest in new product offerings. In addition, we are training and refocusing our global commercial organization to expand our reach to customers in the translational medicine, molecular diagnostics and applied markets.

• Phase III (2015 -2016) –Strategic Flexibility, Expansion of Product Lines; Growth. In this phase, our goal is to have well established growing product lines in translational medicine, clinical diagnostics and applied science such as Ag Bio. We also intend to have a strong balance sheet that will provide us with strategic flexibility.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which we have prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, refer to Note 1, "Summary of Significant Accounting Policies", in the Notes to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q. During the three and six months ended June 30, 2014, there have been no significant changes in our critical accounting policies and estimates compared to the disclosures in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013.

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RESULTS OF OPERATIONS

The following discussion compares the historical results of operations for the three and six months ended June 30, 2014 and 2013.

REVENUE

	Three Months Ended June 30,				$ Change			% Change	Six Months Ended June 30,				$ Change			% Change
	2014		2013						2014		2013
Total revenue ($ in thousands):
Consumables	$	72,601	$	69,973	$	2,628		4%	$	142,488	$	138,099	$	4,389		3%
Instruments	3,279		4,197		(918		)	(22)%	7,088		7,629		(541		)	(7)%
Product sales	75,880		74,170		1,710			2%	149,576		145,728		3,848			3%
Services and other revenue	9,552		5,294		4,258			80%	18,827		11,681		7,146			61%
Total revenue	$	85,432	$	79,464	$	5,968		8%	$	168,403	$	157,409	$	10,994		7%
Segment revenue ($ in thousands):
Affymetrix Core:
Expression	$	17,103	$	20,441	$	(3,338	)	(16)%	$	35,652	$	39,874	$	(4,222	)	(11)%
Genetic analysis and clinical applications	34,233		23,611		10,622			45%	64,454		45,856		18,598			41%
Life science reagents	6,851		8,292		(1,441		)	(17)%	13,794		16,600		(2,806		)	(17)%
Corporate	3,898		4,893		(995		)	(20)%	7,632		10,827		(3,195		)	(30)%
Total Affymetrix Core	62,085		57,237		4,848			8%	121,532		113,157		8,375			7%
eBioscience	23,347		22,227		1,120			5%	46,871		44,252		2,619			6%
Total revenue	$	85,432	$	79,464	$	5,968		8%	$	168,403	$	157,409	$	10,994		7%
Segment revenue (% of revenue):
	2014		2013						2014		2013
Expression	20%		26%						21%		25%
Genetic analysis and clinical applications	40%		30%						38%		29%
Life science reagents	8%		10%						8%		11%
Corporate	5%		6%						5%		7%
Total Affymetrix Core	73%		72%						72%		72%
eBioscience	27%		28%						28%		28%
Total revenue	100%		100%						100%		100%

Product sales

For the three months ended June 30, 2014, total product sales increased $1.7 million as compared to the same period in 2013. The increase was primarily due to higher volume of Cytogenetics, Axiom and ProCarta Plex products. These increases were partially offset by a decline in our legacy in vitro transcription (IVT) expression product sales and a decrease

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in revenue of $1.4 million due to the divestiture of our Anatrace-branded reagents in October of 2013. Instrument revenue decreased due to a lower volume of clinical instrument sales.

For the six months ended June 30, 2014, total product sales increased $3.8 million as compared to the same period in 2013. The increase was primarily due to higher revenues from our Cytogenetics, Axiom and ProCarta Plex product lines. These increases were partially offset by a decline in our legacy in vitro transcription (IVT) expression product sales and a decrease in revenue of $3.0 million due to the divestiture of our Anatrace-branded reagents in October of 2013.

Services and other revenue

For the three months ended June 30, 2014, services and other revenue increased $4.3 million as compared to the same period in 2013, primarily due to increased Axiom genotyping services of $4.0 million and OncoScan services of $0.2 million.

For the six months ended June 30, 2014, services and other revenue increased $7.1 million as compared to the same period in 2013, primarily due to increased Axiom genotyping services of $6.8 million and OncoScan services of $0.6 million. These increases were partially offset by lower royalties and licensing revenue of $0.5 million.

Expression

For the three months ended June 30, 2014, Expression revenue decreased $3.3 million as compared to the same period in 2013, primarily due to lower IVT sales of $3.4 million and lower Expression instrument sales of $0.7 million, partially offset by higher sales of Whole Transcriptome (WT) products of $0.9 million.

For the six months ended June 30, 2014, Expression revenue decreased $4.2 million as compared to the same period in 2013, primarily due to lower IVT sales of $5.1 million and lower Expression instrument sales of $0.7 million, partially offset by higher sales of WT products of $1.1 million.

Genetic Analysis and Clinical Applications

For the three months ended June 30, 2014, Genetic Analysis and Clinical Applications revenue increased $10.6 million as compared to the same period in 2013, primarily due to increased Axiom® product sales and services of $8.4 million, $1.4 million increased CytoScan sales, and $1.1 million increased OncoScan product sales and services, partially offset by a decline in sales of our legacy genotyping product SNP 6.0 of $1.1 million.

For the six months ended June 30, 2014, Genetic Analysis and Clinical Applications revenue increased $18.6 million as compared to the same period in 2013, primarily due to increased Axiom® product sales and services of $11.3 million, $3.5 million increased CytoScan sales, and $2.4 million increased OncoScan product sales and services, partially offset by a decline in sales of our legacy genotyping product SNP 6.0 of $0.4 million.

Life Science Reagents

For the three and six months ended June 30, 2014, Life Science Reagents revenue decreased $1.4 million and $2.8 million, respectively, as compared to the same periods in 2013, primarily due to the divestiture of our Anatrace-branded reagents in October of 2013.

Corporate

For the three months ended June 30, 2014, Corporate revenue decreased $1.0 million, as compared to the same period in 2013, primarily due to a net realized loss from designated cash flow hedges.

For the six months ended June 30, 2014, Corporate revenue decreased $3.2 million, as compared to the same period in 2013, primarily due to a decrease in royalty and license revenue, as well as a net realized loss from designated cash flow hedges.

eBioscience

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For the three and six months ended June 30, 2014, eBioscience revenue increased $1.1 million and $2.6 million, respectively, as compared to the same period in 2013, primarily due to higher volume of ProCarta Plex product sales.

GROSS MARGIN

Dollars in thousands	Three Months Ended June 30,						$/Point Change		Six Months Ended June 30,						$/Point Change
	2014			2013					2014			2013
Total gross profit on product sales	$	45,320		$	40,583		$	4,737	$	89,505		$	77,707		$	11,798
Total gross profit on services and other revenue	3,524			1,588			1,936		5,895			4,468			1,427
Product gross margin	60		%	55		%	5		60		%	53		%	7
Service and other revenue gross margin	37		%	30		%	7		31		%	38		%	(7		)

Product gross profit

For the three months ended June 30, 2014, product gross profit increased $4.7 million as compared to the same period in 2013, primarily due to favorable costs on higher manufacturing volume to support higher sales and cost savings impact of material in-sourcing projects. Product gross profit also improved due to the decline in amortization of step-up in inventory fair value that was recognized when we acquired eBioscience in 2012 and was fully amortized during the quarter ended June 30, 2014. The gross profit for the second quarter of 2014 includes $1.8 million of amortization of step-up in inventory fair value compared to $4.5 million in the same period of 2013. The increases are partially offset by a $0.7 million write-off of material for a discontinued product line in the second quarter of 2014.

For the six months ended June 30, 2014, product gross profit increased $11.9 million as compared to the same period in 2013, primarily due to favorable factory absorption on higher manufacturing volume to support higher sales and cost savings impact of material in-sourcing projects. Product gross profit also improved due to the decline in amortization of step-up in inventory fair value that was recognized when we acquired eBioscience in 2012 and was fully amortized during the quarter ended June 30, 2014. Gross profit for the first half of 2014 includes $4.7 million of amortization of step-up in inventory fair value compared to $9.1 million in the same period of 2013. Also, gross profit for the first half of 2013 included a $0.3 million charge for the transfer of a product line to our Singapore facility which is not recurring in the first half of 2014.

Service gross profit

For the three months ended June 30, 2014, service gross profit increased $1.9 million as compared to the same period in 2013, due to the favorable impact of revenue recognized from a large biobank project in the second quarter of 2014.

For the six months ended June 30, 2014, service gross profit increased $1.3 million as compared to the same period in 2013, due to the favorable impact of revenue recognized from a large biobank project in the second quarter of 2014, partially offset by a decrease in royalty and license revenue.

OPERATING EXPENSES

Dollars in thousands	Three Months Ended June 30,					$ Change		% Change	Six Months Ended June 30,				$ Change			% Change
	2014		2013						2014		2013
Research and development	$	12,882	$	11,959		$	923	8%	$	24,517	$	24,207	$	310		1%
Selling, general and administrative expenses	36,266		33,518			2,748		8%	74,828		68,638		6,190			9%
Litigation settlement	—		—			—		0%	5,100		—		5,100			100%
Restructuring charges	—		(355		)	355		(100)%	—		4,487		(4,487		)	(100)%

Research and development Research and development expense increased $0.9 million and $0.3 million for the three and six months ended June 30, 2014, respectively, as compared to the same periods in 2013. The increases are primarily due

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to increased variable compensation and consulting services in respect of the development of our new instrument, partially offset by lower spending of supplies.

Selling, general and administrative Selling, general and administrative expenses increased $2.7 million and $6.2 million for the three and six months ended June 30, 2014, respectively, as compared to the same periods in 2013. The increases are primarily due to increases in compensation and benefits due to headcount increase and additional legal fees incurred during the current periods primarily related to litigation.

Litigation settlement On April 22, 2014, the Company entered into a settlement agreement with Enzo with respect to our dispute with Enzo Life Sciences, Inc. brought in the Southern District Court of New York. Pursuant to the agreement the Company agreed to pay Enzo $5.1 million as consideration for both parties agreeing to release each other from all liabilities and claims arising under both lawsuits. As the settlement related to past claims with no ongoing benefit, these costs were recognized during the first half of 2014 when the amount was determined to be probable and estimable.

Restructuring charges During the fourth quarter of 2012, the Company initiated a cost reduction action that included workforce reductions to realign the Company's organization to support its strategy to stabilize its core business and position the Company for growth. Restructuring charges of $4.5 million were recognized during the six months ended June 30, 2013. The restructuring activities was completed in the second quarter of 2013.

OPERATING LOSS

Management evaluates business segment performance based on revenue and loss from operations. The following table presents operating loss for each reportable segment and a reconciliation of our segment operating loss to loss before income taxes:

Dollars in thousands	Three Months Ended June 30,						$ Change			% Change	Six Months Ended June 30,						$ Change			% Change
	2014			2013							2014			2013
Operating loss:
Affymetrix Core	$	854		$	265		$	589		222%	$	(6,734	)	$	(7,789	)	$	1,055		(14)%
eBioscience	(1,158		)	(3,216		)	2,058			(64)%	(2,311		)	(7,368		)	5,057			(69)%
Total operating loss	$	(304	)	$	(2,951	)	$	2,647		(90)%	$	(9,045	)	$	(15,157	)	$	6,112		(40)%
Reconciliation to loss before income taxes :
Interest income and other, net	1,418			$	89		$	1,329		1,493%	$	1,711		$	432		$	1,279		296%
Interest expense	1,623			2,724			(1,101		)	40%	3,377			5,622			(2,245		)	40%
Loss before income taxes	$	(509	)	$	(5,586	)	$	5,077		91%	$	(10,711	)	$	(20,347	)	$	9,636		47%

Interest income and other, net Interest income and other, net, increased $1.3 million for each of the three and six months ended June 30, 2014, as compared to the same periods in 2013. The increases are primarily due to a gain recorded in the second quarter of 2014 related to the liquidation of certain investments and subsequent receipt of cash from the fund that holds our investment in non-marketable securities.

Interest expense Interest expense decreased $1.1 million and $2.2 million for the three and six months ended June 30, 2014, respectively, as compared to the same periods in 2013. The decreases are due to a combination of lower outstanding borrowings in the second quarter and the first half of 2014 as well as lower interest rates following the refinance of our Senior Secured Credit Facility in October 2013, compared to the same period of the prior year.

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INCOME TAX PROVISION

Dollars in thousands	Three Months Ended June 30,				$ Change			% Change	Six Months Ended June 30,				$ Change			% Change
	2014		2013						2014		2013
Income tax provision	$	402	$	521	$	(119	)	23%	$	674	$	1,196	$	(522	)	44	%

During the three and six months ended June 30, 2014, the Company recognized a provision for income taxes of $0.4 million and $0.7 million, respectively. The provision for income taxes during the three months ended June 30, 2014 primarily consists of foreign taxes, an income tax expense of $0.1 million resulting from a reduction in valuation allowance for net deferred tax assets arising from other comprehensive income recorded in accordance with intraperiod tax allocation guidance, and an income tax benefit of $0.3 million related to lapses of statutes of limitations. The provision for income taxes during the six months ended June 30, 2014 primarily consists of foreign taxes, offset by an income tax benefit of $0.1 million resulting from a reduction in valuation allowance for net deferred tax assets arising from other comprehensive income recorded in accordance with intraperiod tax allocation guidance, and an income tax benefit of $0.3 million related to the lapses of statutes of limitations.

Due to the Company’s history of cumulative operating losses, management concluded that, after considering all the available objective evidence, it is not more likely than not that all the Company’s net deferred tax assets will be realized. Accordingly, all of the Company's U.S. deferred tax assets continue to be subject to a valuation allowance as of June 30, 2014.

As of June 30, 2014, the total amount of our unrecognized tax benefits has decreased by approximately $0.3 million as compared to December 31, 2013, due to the lapses of statutes of limitations. As a result of settlements of ongoing tax examinations and/or expiration of statues of limitations without the assessment of additional income taxes, the amount of unrecognized tax benefits that could be recognized in earnings in the next 12 months could range from zero to approximately $1.8 million.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have financed our operations primarily through product sales; borrowings under credit arrangements; sales of equity and debt securities such as our 4.00% Notes, collaborative agreements; and licensing of our technology.

Our cash outflows have generally been as follows: cash used in operating activities such as research and development programs, sales and marketing activity, compensation and benefits of our employees and other working capital needs; cash paid for acquisitions; cash paid for litigation activity and settlements; and cash used for the payment of principal on debt obligations and repurchases of our convertible notes as well as interest payments on our long-term debt obligations.

As of June 30, 2014, we had cash and cash equivalents of approximately $51.5 million. We anticipate that our existing capital resources along with the cash to be generated from operations will enable us to maintain currently planned operations, debt repayments, and capital expenditures for the foreseeable future. These expectations are based on our current operating and financing plans, which are subject to change, and therefore we could require further funding. Factors that may cause us to require additional funding may include, but are not limited to: costs associated with defending third party claims; an adverse ruling in any of our current litigation proceedings; investments required to commercialize our products; investments required to upgrade our older product lines; a decline in cash generated by sales of our products and services; our ability to maintain existing collaborative and customer arrangements and establish and maintain new collaboration and customer arrangements; arrangements that we may enter into in connection with future acquisitions or dispositions; the progress of our research and development programs; initiation or expansion of research programs and collaborations; the costs involved in preparing, filing, prosecuting and enforcing intellectual property rights; the purchase of patent licenses; and other factors.

During October 2013, we prepaid approximately $17.0 million of our senior secured debt with a combination of cash on hand and proceeds from the sale of the business that manufactures and sells Anatrace-branded reagents. On October 17, 2013, we refinanced approximately $48.0 million of our remaining senior secured debt that will lower our annual interest

26

expense and improve our debt maturity profile. As of June 30, 2014, the carrying amount of the senior secured debt was $25.0 million.

On July 28, 2014, we entered into the Fifth Amendment, which provides, among other things, for (1) an uncommitted incremental term loan facility in an aggregate amount not to exceed $50.0 million and (2) the reduction of interest rate margins.

As part of the terms of the senior secured debt agreement, we are required to meet certain financial and other negative covenants. As of June 30, 2014, we were in compliance with the amended covenants. Refer to Note 7, “Long-Term Debt Obligations”, for further details regarding our Senior Secured Credit Facility and 4.00% Notes.

From time to time, we may seek to retire, repurchase or exchange common stock or convertible notes in open market purchases, privately negotiated transactions dependent on market conditions, liquidity, and contractual obligations and other factors. We did not retire, repurchase or exchange any of our common stock during the three and six months ended June 30, 2014.

Cashflow (in thousands)

	Six Months Ended June 30,
	2014			2013
Net cash provided by operating activities	$	7,634		$	21,712
Net cash provided by (used in) investing activities	(768		)	6,453
Net cash used in financing activities	(12,522		)	(9,938		)

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2014 was comprised of net loss of $11.4 million, non-cash charges of $26.0 million and a decrease of $7.0 million related to changes in operating assets and liabilities. Adjustments for non-cash expenses include depreciation and amortization expense of $16.5 million, amortization expense related to inventory step-up in fair value of $4.7 million (which was fully amortized as of June 30, 2014), and share-based compensation expense of $6.3 million.

Net cash provided by operating activities for the six months end June 30, 2013 was comprised of net loss of $21.5 million, non-cash charges of $33.1 million and an increase of $10.2 million related to changes in operating assets and liabilities. Adjustments for non-cash expenses include depreciation and amortization expense of $20.4 million, amortization expense related to inventory step-up in fair value of $9.1 million, share-based compensation expense of $3.1 million.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2014 included proceeds from sale of non-marketable securities of $2.2 million and capital expenditures of $3.0 million.

Net cash provided by investing activities for the six months ended June 30, 2013 included $9.4 million in cash proceeds resulting from the sale of our remaining available-for-sale securities, offset by $2.3 million spent on capital expenditures.

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2014 included $14.5 million of early payments on the outstanding principal amount of borrowings under our Term Loan agreement.

Net cash used in financing activities for the six months ended June 30, 2013 included $3.9 million in payments to repurchase our 3.50% Notes and $6.4 million in payments on the outstanding principal amount of our Term Loan. In addition to certain mandatory payments, from time to time, we also may make early payments on the outstanding principal amount of our Term Loan.

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OFF-BALANCE SHEET ARRANGEMENTS AND AGGREGATE CONTRACTUAL OBLIGATIONS

As of June 30, 2014, we had no off-balance sheet arrangements. There have been no significant changes to our aggregate contractual obligations as compared to the disclosures in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013, except with respects to the prepayment of amounts owned under our Term Loan as discussed above and leases described below.

On June 20, 2014, the Company entered into two leases with BMR-10255 Science Center LP and BMR-10240 Science Center Drive LP, for two premises located in San Diego, California (the “Leases”). The Leases cover premises totaling approximately 82,759 rentable square feet. Subject to the completion of tenant improvements, both Leases are expected to commence in August 2015 and expire in March 2023. The Company expects to bring all employees of its eBioscience business unit in San Diego within closer proximity upon the commencement of the Leases.

Future minimum lease obligations, net of sublease income, as of June 30, 2014 under the two leases mentioned above are as follows (in thousands):

For the Year Ending December 31,	Amount
2014, remainder thereof	$	—
2015	780
2016	2,324
2017	2,393
2018	2,462
Thereafter	11,242
Total	$	19,201

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Rate Risk

We derive a portion of our revenues in foreign currencies, predominantly in Europe and Japan. In addition, a portion of our assets are held in nonfunctional currencies of our subsidiaries. We use currency forward contracts to manage a portion of the currency exposures created from our activities denominated in foreign currencies. Our hedging program is designed to reduce, but does not entirely eliminate, the impact of currency exchange rate movements. See Note 1, "Summary of Significant Accounting Policies – Derivative Instruments", in the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2013 for further information.

Interest Rate Risk

We are exposed to market risk from changes in interest rates on long-term obligations. We have a combination of fixed and variable rate debt. Refer to Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2013. In 2013, we refinanced $48.0 million under our Senior Secured Credit Facility. Our interest rate risk relates primarily to U.S. dollar LIBOR-indexed borrowings.

A 100 basis point increase in interest rates on the current borrowings is not expected to have a material impact on our financial position, results of operations or cash flows since interest on our borrowings is not material to our overall financial position.

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ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure controls and procedures.

Affymetrix’s management carried out an evaluation, as required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)), as of the end of our last fiscal quarter. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q, such that the information relating to Affymetrix and its consolidated subsidiaries required to be disclosed in our Exchange Act reports filed with the SEC (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to Affymetrix’s management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

Affymetrix’s management carried out an evaluation, as required by Rule 13a-15(d) of the Exchange Act, with the participation of our Chief Executive Officer and our Chief Financial Officer, of changes in Affymetrix’s internal control over financial reporting. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that there were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information pertaining to legal proceedings can be found in Note 9, "Commitments and Contingencies" to our Condensed Consolidated Financial Statements elsewhere in this Quarterly Report on Form 10-Q, and is incorporated by reference herein.

ITEM 1A. RISK FACTORS

Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which we strongly encourage you to review. There have been no material changes from the risk factors disclosed in Item 1A of our Form 10-K.

ITEM 2. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 3. OTHER INFORMATION

None.

ITEM 4. EXHIBITS

Exhibit Number	Description of Document
10.54(1)	Lease between the Company and BMR-10255 Science Center LP dated June 20, 2014 (10255 Science Center Drive, San Diego, CA)
10.55(1)	Lease between the Company and BMR-10240 Science Center LP dated June 20, 2014 (10240 Science Center Drive, San Diego, CA)
10.56(2)	Limited Waiver and Fifth Amendment to Credit Agreement dated July 28, 2014
31.1(2)	Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2(2)	Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32(2)	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
EX-101.INS	XBRL Instance Document(3)
EX-101.SCH	XBRL Taxonomy Extension Schema Document(3)
EX-101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document(3)
EX-101.DEF	XBRL Taxonomy Extension Definition Linkbase Document(3)
EX-101.LAB	XBRL Taxonomy Extension Label Linkbase Document(3)
EX-101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document(3)

(1) Incorporated by reference to the Company's Current Report on Form 8-K as filed on June 25, 2014.

(2) Filed herewith.

(3) Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	By:	/s/ GAVIN WOOD
	Name:	Gavin H. J. Wood
	Title:	Executive Vice President and Chief Financial Officer
August 4, 2014
		Duly Authorized Officer and Principal Financial And Accounting Officer

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EX-10.56

LIMITED WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT

THIS LIMITED WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of July 28, 2014, by and among AFFYMETRIX, INC., a Delaware corporation (the “Borrower”), the other Credit Parties signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), for itself and as agent for the Lenders (in such capacity, the “Agent”), and the Lenders signatory hereto. Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them in the Credit Agreement (as hereinafter defined), as amended.

R E C I T A L S:

WHEREAS, the Borrower, the other Credit Parties party thereto, the Agent and the Lenders entered into that certain Credit Agreement, dated as of June 25, 2012 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”);

WHEREAS, the Event of Default set forth on Schedule A hereto (such Event of Default, the “Specified Default”) has occurred; and

WHEREAS, the Credit Parties have requested that the Agent and the Lenders party hereto amend certain provisions of the Credit Agreement and waive the Specified Default, and the Agent and each Lender party hereto agree to such amendments and waiver upon the terms and subject to the conditions set forth herein.

NOWTHEREFORE, in consideration of the premises and the mutual agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.    Limited Waiver. Effective as of the Fifth Amendment Effective Time (as defined below), the Agent and each Lender party hereto hereby waive the Specified Default; provided, that the foregoing waiver shall be limited precisely as written and shall not be deemed or otherwise construed to constitute a waiver of any other Default or Event of Default which does not constitute a Specified Default now existing or hereafter arising.

Section 2.    Amendments. Effective as of the Fifth Amendment Effective Time (as defined below):

(a)Subsection 1.1(a) of the Credit Agreement is hereby amended by amending and restating the penultimate sentence thereof to read in its entirety as follows:

“The New Term Loans and the Incremental Term Loans are sometimes referred to individually as a “Term Loan” and together as the “Term Loans” and the New Term Loan Commitments and the Incremental Term Loan Commitments are sometimes referred to

CH\1898062.5

individually as a “Term Loan Commitment” and together as the “Term Loan Commitments”.”

(b)Section 1.1 of the Credit Agreement is hereby amended by adding the following subsection (e) at the end of such Section:

“(e)    Incremental Facilities.

(i)    Requests. The Borrower may, by written notice to Agent (each, an “Incremental Facility Request”), request increases in the Term Loan Commitments (each, an “Incremental Term Loan Commitment” and the term loans thereunder, an “Incremental Term Loan”; each Incremental Term Loan Commitment is sometimes referred to herein individually as an “Incremental Facility” and collectively as the “Incremental Facilities”) in Dollars in an aggregate amount not to exceed $50,000,0000 for all such Incremental Facilities; provided that no more than four (4) Incremental Facility Requests may be requested and approved during the term of this Agreement, provided, further, that the Borrower may seek Incremental Term Loan Commitments from existing Lenders (each of whom shall be entitled to agree to decline to participate in its sole discretion) and additional banks, financial institutions and other institutional lenders who will become Incremental Lenders in connection therewith, it being understood and agreed that no commitment of any Lender shall be increased without the consent of such Lender. Each such notice shall set forth (A) the amount of the Incremental Term Loan Commitment being requested (which shall be in a minimum amount of $5,000,000 and multiples of $100,000 in excess thereof), (B) the date (an “Incremental Effective Date”) on which such Incremental Facility is requested to become effective (which, unless otherwise agreed by Agent, shall not be less than ten (10) Business Days nor more than sixty (60) days after the date of such notice), and (C) whether the related Incremental Term Loan is to be a LIBOR Rate Loan or a Base Rate Loan (and, if a LIBOR Rate Loan, the Interest Period therefor).

(ii)    Conditions. No Incremental Facility shall become effective under this subsection 1.1(e) unless, after giving effect to such Incremental Facility, the Loans to be made thereunder, and the application of the proceeds therefrom;

(A)    no Default or Event of Default shall exist at the time of funding or, solely with respect to an Incremental Term Loan the proceeds of which are intended to and shall be used to finance substantially contemporaneously a Permitted Acquisition or any other acquisition permitted by Section 5.4 which financing is subject to customary “Funds Certain Provisions”, unless the Persons holding not less than a majority of the commitments to provide

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such Incremental Term Loan waive the absence of a Default or Event of Default as a condition to funding thereof, on the date on which the related acquisition agreement is executed and becomes effective (any such date, an “Acquisition Agreement Signing Date”);

(B)    as of the last day of the most recent Fiscal Quarter or Fiscal Year (whichever is the most recent) for which financial statements were required to have been delivered pursuant to subsection 4.1(a) or subsection 4.1(b), as applicable, the Senior Leverage Ratio recomputed on a pro forma basis shall not exceed the maximum Senior Leverage Ratio permitted under Section 6.3 at such time;

(C)    proceeds of such Incremental Facility shall be used solely to finance or refinance the purchase price (and related fees and expenses) of a Permitted Acquisition or any other acquisition permitted by Section 5.4 consummated substantially concurrently with the incurrence thereof or within ninety (90) days prior to the date of incurrence;

(D)    Agent shall have received a certificate of a Responsible Officer of the Borrower certifying as to the foregoing; and

(E)    Agent shall have received such other legal opinions, secretary certificates, good standing certificates and/or authorizing resolutions as are reasonably requested by the Agent.

(iii)    Terms. The final maturity date of any Incremental Term Loan that is a separate tranche shall be no earlier than the final maturity date of the New Term Loans and the Weighted Average Life to Maturity of any such Incremental Term Loan shall not be shorter than the Weighted Average Life to Maturity of the New Term Loans. If the initial all-in yield (including interest rate margins, any interest rate floors, original issue discount and upfront fees (based on the lesser of a four-year average life to maturity or the remaining life to maturity), but excluding reasonable and customary arrangement, structuring and underwriting fees paid or payable to GE Capital or any of its Affiliates with respect to such Incremental Term Loan) applicable to any Incremental Term Loan exceeds by more than 0.50% per annum the corresponding all-in yield (determined on the same basis) applicable to the New Term Loans, the then outstanding New Term Loans (the amount of such excess above 0.50% being referred to herein as the “Yield Differential”), then the Applicable Margin with respect to the then outstanding New Term Loans shall automatically be increased by the Yield Differential, effective upon the making of such Incremental Term Loan (it being agreed that to the extent the all-in-yield with

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respect to such Incremental Term Loan is greater than the all-in-yield of the then outstanding New Term Loans solely as a result of a higher LIBOR floor, then the increased interest rate applicable to the then outstanding New Term Loans shall be effected solely by increasing the LIBOR floor applicable thereto). Any Incremental Term Loan shall rank pari passu in right of payment and security with the New Term Loans. Except with respect to amortization, pricing and final maturity as set forth in this clause (iii), and except with respect to the period following the maturity date of the New Term Loans, any Incremental Term Loan shall be on terms consistent with the New Term Loans.

(iv)    Required Amendments. Each of the parties hereto hereby agrees that, upon the effectiveness of any Incremental Facility, this Agreement shall be amended to the extent (but only to the extent) necessary to reflect the existence of such Incremental Facility and the Loans evidenced thereby, and any joinder agreement or amendment may without the consent of the other Lenders effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of Agent and Borrower, to effectuate the provisions of this subsection 1.1(e), and, for the avoidance of doubt, this subsection 1.1(e) shall supersede any provisions in Section 9.1. From and after each Incremental Effective Date, (x) the Loans and Commitments established pursuant to this subsection 1.1(e) shall constitute Loans and Commitments under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from the guarantees and security interests created by the applicable Collateral Documents and (y) the Incremental Term Lenders holding such Loans and Commitments shall constitute Lenders hereunder. The Credit Parties shall take any actions reasonably required by Agent to ensure and/or demonstrate that the Liens and security interests granted by the applicable Collateral Documents continue to be perfected under the UCC or otherwise after giving effect to the establishment of any such new Loans and Commitments, including compliance with subsection 4.12(c). Each of the parties hereto hereby agrees that Agent may, in consultation with the Borrower, take any and all action as may be reasonably necessary to ensure that all Incremental Term Loans which are not separate tranches, when originally made, are included in each Borrowing of outstanding Term Loans on a pro rata basis. This may be accomplished by requiring each outstanding Borrowing of Term Loans that are LIBOR Rate Loans to be converted into a Borrowing of Term Loans that are Base Rate Loans on the date of each such Incremental Term Loan, or by allocating a portion of each such Incremental Term Loan to each outstanding Borrowing of Term Loans that are LIBOR Rate Loans on a pro rata basis. Any conversion of LIBOR Rate Loans to Base Rate Loans required by the preceding sentence shall be subject to Section 10.4.

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If any Incremental Term Loan is to be allocated to an existing Interest Period for a Borrowing of LIBOR Rate Loans, then the interest rate thereon for such Interest Period shall be as set forth in the applicable Incremental Term Loan joinder agreement or amendment. In addition, the scheduled amortization payments under subsection 1.8(a) required to be made after the making of any Incremental Term Loans which are not separate tranches shall be ratably increased by the aggregate principal amount of such Incremental Term Loans for all Lenders on a pro rata basis to the extent necessary to avoid any reduction in the amortization payments to which the Term Loan Lenders were entitled before such recalculation.”

(c)Subsection 1.2(a) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

“(a)    The Term Loans made by each Lender are evidenced by this Agreement and, if requested by such Lender, a Term Note payable to such Lender in an amount equal to the unpaid balance of the Term Loans held by such Lender.”

(d)Subsection 1.8(a) of the Credit Agreement is hereby amended by adding the following sentence to the end of such subsection:

“Scheduled installments for an Incremental Term Loan shall be as specified in the applicable amendment or joinder agreement.”

(e)Article I of the Credit Agreement is hereby amended by adding a new Section 1.12 thereto as follows:

“1.12    Extension of Term Loans and Revolving Loan Commitments.

(a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension Offer”) made from time to time by the Borrower to all Term Lenders whose Term Loans have a like maturity date or Revolving Lenders whose Revolving Loan Commitments have a like maturity date, in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective New Term Loans, Incremental Term Loans or Revolving Loan Commitments with a like maturity date, as the case may be) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date and/or commitment termination of each such Lender’s New Term Loans, Incremental Term Loans and/or Revolving Loan Commitments and, subject to the terms hereof, otherwise modify the terms of such New Term Loans, Incremental Term Loans and/or Revolving Loan Commitments pursuant to the terms of the relevant Extension Offer (including by increasing the interest rate and/or fees payable in respect of such New Term Loans, Incremental Term Loans and/

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or Revolving Loan Commitments (and related outstandings) and/or modifying the amortization schedule in respect of such Lender’s New Term Loans or Incremental Term Loans) (each, an “Extension”, and each group of New Term Loans, Incremental Term Loans or Revolving Loan Commitments, as applicable, in each case as so extended, as well as the original New Term Loans or Incremental Term Loans and the original Revolving Loan Commitments (in each case not so extended), being a “tranche”; any Extended Term Loans (as defined below) shall constitute a separate tranche of New Term Loans or Incremental Term Loans from the tranche of New Term Loans or Incremental Term Loans from which they were converted, and any Extended Revolving Commitments (as defined below) shall constitute a separate tranche of Revolving Loan Commitments from the tranche of Revolving Loan Commitments from which they were converted), so long as the following terms are satisfied:

(i)except as to interest rates, fees and final commitment termination date (which shall be determined by the Borrower and set forth in the relevant Extension Offer, subject to acceptance by the Extending Revolving Lenders (as defined below)), the Revolving Loan Commitment of any Revolving Lender that agrees to an extension with respect to such Revolving Loan Commitment (an “Extending Revolving Lender”) extended pursuant to an Extension (an “ExtendedRevolving Commitment”) and the related outstandings shall be a Revolving Loan Commitment (or related outstandings, as the case may be) with the same terms as the original Revolving Loan Commitments (and related outstandings); provided that (A) subject to subsection 9.1(b), all Swing Loans and all Letters of Credit shall be participated in on a pro rata basis by all Lenders with Revolving Loan Commitments (including Extended Revolving Commitments) in accordance with their Commitment Percentage of the Revolving Loan Commitments and all borrowings under Revolving Loan Commitments and repayments thereunder shall be made on a pro rata basis (except for (1) payments of interest and fees at different rates on Extended Revolving Commitments and (2) repayments required upon the maturity date of the non-extending Revolving Loan Commitments) and (B) at no time shall there be Revolving Loan Commitments hereunder (including Extended Revolving Commitments and any original Revolving Loan Commitments) which have more than three (3) different maturity dates;

(ii)except as to interest rates, fees, amortization, final maturity date, premium, required prepayment and participation in prepayments (which shall, subject to immediately succeeding clauses (iii), (iv), (v) and (vi)), be determined between the Borrower and the extending Lender and set forth in the relevant Extension Offer), the New Term Loans or Incremental Term Loans of any Lender that agrees to an Extension with respect to such New Term Loans or Incremental

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Term Loans (an “Extending Term Lender”) extended pursuant to any Extension (“Extended Term Loans”) shall have the same terms as the tranche of New Term Loans or Incremental Term Loans subject to such Extension Offer;

(iii)the final maturity date of any Extended Term Loans shall be no earlier than the latest maturity date of the New Term Loans or Incremental Term Loans extended thereby, as applicable, and the amortization schedule applicable to the Term Loans pursuant to Section 1.8 for periods prior to the original maturity date of the Term Loans may not be increased;

(iv)the Weighted Average Life to Maturity of any Extended Term Loans shall be no shorter than the Weighted Average Life to Maturity of the New Term Loans or Incremental Term Loans extended thereby;

(v)any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Extension Offer;

(vi)if the aggregate principal amount of New Term Loans or Incremental Term Loans (calculated on the outstanding principal amount thereof) and/or Revolving Loan Commitments, as the case may be, in respect of those Lenders who shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of New Term Loans, Incremental Term Loans or Revolving Loan Commitments, as the case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the New Term Loans, Incremental Term Loans and/or Revolving Loan Commitments, as the case may be, of such Lenders shall be extended ratably up to such maximum amount based on the respective principal or commitment amounts (but not to exceed actual holdings of record) with respect to which such Lenders have accepted such Extension Offer;

(vii)any applicable Minimum Extension Condition (as defined below) shall be satisfied unless waived by the Borrower; and

(viii)no Default or Event of Default shall have occurred and be continuing at the time the applicable Extension is to become effective.

(b)With respect to all Extensions consummated by the Borrower pursuant to this Section 1.12, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Sections 1.7 or 1.8 and (ii) no Extension Offer is required to be in any minimum amount or any minimum increment; provided that the Borrower may at its election specify as a condition (a “Minimum Extension Condition”) to consummating

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any such Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s sole discretion and may be waived by the Borrower) of New Term Loans, Incremental Term Loans or Revolving Loan Commitments (as applicable) of any or all applicable tranches be extended. The Agent, the L/C Issuer and the Lenders hereby consent to the transactions contemplated by this Section 1.12 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans and/or Extended Revolving Commitments on the terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including Sections 1.7, 1.8, 1.10, 1.11 and 9.11) or any other Loan Document that may otherwise prohibit or restrict any such Extension or any other transaction contemplated by this Section 1.12.

(c)No consent of any Lender, the L/C Issuer or the Agent shall be required to effectuate any Extension, other than (i) the consent of each Lender agreeing to such Extension with respect to one or more of its New Term Loans, Incremental Term Loans and/or Revolving Loan Commitments (or a portion thereof) and (ii) with respect to any Extension of the Revolving Loan Commitments, the consent of the L/C Issuer and Swing Line Lender, which consent shall not be unreasonably withheld or delayed. All Extended Term Loans, Extended Revolving Commitments and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order to establish new tranches in respect of Revolving Loan Commitments, New Term Loans or Incremental Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Agent and the Borrower in connection with the establishment of such new tranches, in each case on terms consistent with this Section 1.12. In addition, if so provided in such amendment and with the consent of the L/C Issuer, participations in Letters of Credit expiring after the maturity date for any tranche of Revolving Loan Commitments shall be re-allocated from Lenders holding the terminating Revolving Loan Commitments to Lenders holding Extended Revolving Commitments that are not terminating or, to the extent not so reallocated, cash collateralized, in each case in accordance with the terms of such amendment; provided, however, that such participation interests shall, upon receipt thereof by the relevant Lenders holding Revolving Loan Commitments, be deemed to be participation interests in respect of such Revolving Loan Commitments and the terms of such participation interests shall be adjusted accordingly. Without limiting the foregoing, in connection with any Extensions the applicable Credit Parties shall (at their expense) amend (and Agent is hereby directed by the Lenders to amend) any Mortgage that has a maturity date prior to the later of the then latest (x) maturity date of the Term Loans and (y) scheduled termination date of the Revolving

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Loan Commitments, so that such maturity date referenced therein is extended to the later of the then (x) latest maturity date of the Term Loans and (y) scheduled termination date of the Revolving Loan Commitments (or such later date as may be advised by local counsel to Agent). Agent shall promptly notify each Lender of the effectiveness of each such amendment.

(d)In connection with any Extension, the Borrower shall provide the Agent at least ten (10) Business Days’ (or such shorter period as may be agreed by the Agent) prior written notice thereof, and shall agree to such procedures (including those regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Agent, in each case acting reasonably to accomplish the purposes of this Section 1.12.

(e)This Section 1.12 shall supersede any provision of Section 9.1 or Section 9.11 to the contrary.”

(f)Subsection 2.2(a) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

“(a)    any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect in any material respect (without duplication of any materiality qualifier contained therein) as of such date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were untrue or incorrect in any material respect (without duplication of any materiality qualifier contained therein) as of such earlier date), and (i) with respect to Revolving Loans or Issuances of Letters of Credit, Agent or Required Revolving Lenders have determined not to make such Loan or incur such Letter of Credit Obligation as a result of the fact that such warranty or representation is untrue or incorrect or (ii) with respect to Incremental Term Loans, the Persons providing such Incremental Term Loans have determined not to make such Incremental Term Loans as a result of the fact that such representation or warranty is untrue or incorrect (it being understood and agreed that such Persons may agree to only require the accuracy of customary specified representations); provided, that with respect to Incremental Term Loans the proceeds of which are used to finance a Permitted Acquisition or any other acquisition permitted by Section 5.4 consummated substantially concurrently with the incurrence thereof which financing is subject to customary “Funds Certain Provisions”, the representation and warranty in the first sentence of Section 3.6 shall be deemed to expressly relate to the applicable Acquisition Agreement Signing Date;”

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(g)Subsection 2.2(b) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

“(b)    (i) with respect to Revolving Loans or Issuances of Letters of Credit, other than on the Closing Date, any Default or Event of Default has occurred and is continuing or would result immediately after giving effect to any Loan (or the incurrence of any Letter of Credit Obligation), and Agent or Required Revolving Lenders shall have determined not to make such Loan or incur any Letter of Credit Obligation as a result of that Default or Event of Default, or (ii) with respect to Incremental Term Loans, the conditions set forth in subsection 1.1(e)(ii)(A) shall not be or have been satisfied; and”

(h)Section 4.10 of the Credit Agreement is hereby amended by adding the following sentence to the end of such Section:

“The Borrower shall use proceeds of Incremental Term Loans solely as provided in subsection 1.1(e)(ii)(C).”

(i)Section 4.12(b) of the Credit Agreement is hereby amended (i) by replacing the words “any fee interest in real property having a fair market value in excess of $250,000” contained in the fifth sentence thereof with the words “any fee interest in real property having a fair market value in excess of $1,000,000” and (ii) by adding the following new sentence at the end thereof: “Notwithstanding the foregoing, with respect to perfection of Liens in the case of an Acquisition being financed with proceeds of an Incremental Term Loan, the requirements of this Section 4.12(b) shall be subject to customary “Funds Certain Provisions” as agreed by the Lenders providing such Incremental Term Loans.”.

(j)Section 4.12 of the Credit Agreement is hereby amended by adding the following subsection (c) at the end of such Section:

“(c)    Without limiting the generality of the foregoing, to the extent reasonably necessary to maintain the continuing priority of the Lien of any existing Mortgages as security for the Obligations in connection with the incurrence of an Incremental Facility, as determined by Agent in its reasonable discretion, the applicable Credit Party to any Mortgages shall within thirty (30) days of such incurrence (or such later date as agreed by Agent) (i) enter into and deliver to Agent, at the direction and in the reasonable discretion of Agent, a mortgage modification or new Mortgage in proper form for recording in the relevant jurisdiction and in a form reasonably satisfactory to Agent, (ii) cause to be delivered to Agent for the benefit of the Secured Parties an endorsement to the title insurance policy, date down(s) or other evidence reasonably satisfactory to Agent insuring that the Lien of the Mortgages as security for the Obligations is continuing and there are no liens or encumbrances (other than Permitted Liens described in subclauses 5.1(a) through 5.1(v)).”

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(k)Section 4.14 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

“4.14    Interest Rate Protection. Within ninety (90) days of the Closing Date, and within ninety (90) days after incurring an Incremental Term Loan, the Borrower shall enter into, and thereafter maintain, Rate Contracts providing protection against fluctuations in interest rates with one or more financial institutions with respect to at least 35% of the aggregate principal amount of the Term Loans then outstanding, which agreements shall provide for not less than a three (3) year term from the Closing Date or, with respect to an Incremental Term Loan, from the date of incurrence thereof, and containing such other terms as are customary and are reasonably satisfactory to Agent; provided, however, no Rate Contracts shall be required pursuant to this Section 4.14 for any period in which the outstanding principal balance of the Term Loans (including any outstanding Incremental Term Loans) does not exceed $30,000,000.”

(l)Subsection 9.1(e) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

“(e)    Notwithstanding anything to the contrary contained in this Section 9.1, (i) the Borrower may amend Schedules 3.19 and 3.21 upon notice to Agent, (ii) Agent may amend Schedule 1.1(a) or Schedule 1.1(b) to reflect Incremental Facilities, Extensions and Sales entered into pursuant to Section 9.9, (iii) Agent and the Borrower may amend or modify this Agreement and any other Loan Document to (1) cure any ambiguity, omission, defect or inconsistency therein, (2) grant a new Lien for the benefit of the Secured Parties, extend an existing Lien over additional Property for the benefit of the Secured Parties or join additional Persons as Credit Parties, and (3) add one or more Incremental Facilities to this Agreement pursuant to subsection 1.1(e) or add Extended Term Loans and Extended Revolving Commitments pursuant to Section 1.12 and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and the Revolving Loans and to include appropriately the Lenders holding such credit facilities in any determination of Required Lenders, and (iv) Required Lender consent shall not be required for amendments or waivers of any provision of the Master Agreement for Standby Letters of Credit, each Master Intercompany Subordinated Note, the Fee Letter, any Control Agreement, any landlord waiver or any other similar agreement.”

(m)Section 11.1 of the Credit Agreement is hereby amended by adding the following defined terms in the appropriate alphabetical order to the table of defined terms and section references contained at the beginning of such Section:

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“Acquisition Agreement Signing Date”	1.1(e)(ii)
“Extended Revolving Commitment” “Extended Term Loans” “Extending Revolving Lender” “Extending Term Lender” “Extension” “Extension Offer”	1.12(a)(i) 1.12(a)(ii) 1.12(a)(i) 1.12(a)(ii) 1.12(a) 1.12(a)
“Incremental Effective Date”	1.1(e)(i)
“Incremental Facility”	1.1(e)(i)
“Incremental Facility Request”	1.1(e)(i)
“Incremental Term Loan”	1.1(e)(i)
“Incremental Term Loan Commitment”	1.1(e)(i)
“Minimum Extension Condition” “tranche” “Yield Differential”	1.12(b) 1.12(a) 1.1(e)(iii)

(n)Section 11.1 of the Credit Agreement is hereby amended by amending and restating the definition of “Aggregate Term Loan Commitment” to read in its entirety as follows:

““Aggregate Term Loan Commitment” means the sum of (i) the combined New Term Loan Commitments of the Lenders, which shall initially be in the amount of $38,000,000, plus (ii) the combined Incremental Term Loan Commitments of the Lenders, as such amount may be reduced from time to time pursuant to this Agreement or increased as a result of Incremental Term Loan Commitments.”

(o)Section 11.1 of the Credit Agreement is hereby amended by amending and restating the chart contained in clause (b) of the definition of “Applicable Margin” to read in its entirety as follows:

“Revolving Loans, Swing Loans and Term Loan
Senior Leverage Ratio	LIBOR Margin	Base Rate Margin
Greater than or equal to 1.00:1.00	2.75%	1.75%
Less than 1.00:1.00	2.50%	1.50%”

(p)Section 11.1 of the Credit Agreement is hereby amended by amending and restating clauses (c) and (e) of the definition of “Permitted Acquisition” to read in their entirety as follows:

“(c)    the Borrower and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Section

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4.12 subject, with respect to perfection of Liens in the case of an Acquisition being financed with proceeds of an Incremental Term Loan, to customary “Funds Certain Provisions”, and Agent shall have received, for the benefit of the Secured Parties, a collateral assignment of the seller’s representations, warranties and indemnities to the Borrower or any of its Subsidiaries under the acquisition documents;”

“(e)    no Default or Event of Default shall then exist or would exist after giving effect thereto or, with respect to an Acquisition being financed with proceeds of an Incremental Term Loan, no Default or Event of Default exists as of, or would exist if such Acquisition were consummated on, such Acquisition Agreement Signing Date unless the Persons holding not less than a majority of the commitments to provide such Incremental Term Loan waive such Default or Event of Default as a condition to such Acquisition;”

(q)Section 11.1 of the Credit Agreement is hereby amended by adding the following defined term in the appropriate alphabetical order:

““Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness; provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being modified, refinanced, refunded, renewed, replaced or extended, the effects of any prepayments made on such Indebtedness prior to the date of the applicable extension shall be disregarded.”

(r)Exhibit 1.8(e) of the Credit Agreement is hereby amended and restated to read in its entirety as set forth on Exhibit 1.8(e) attached hereto.

(s)Exhibit 4.2(b) of the Credit Agreement is hereby amended and restated to read in its entirety as set forth on Exhibit 4.2(b) attached hereto.

Section 3.    Conditions. This Amendment shall be effective at the time (the “Fifth Amendment Effective Time”) that all of the following conditions precedent have been met as determined by the Agent in its sole discretion:

(a)Signatures. Agent shall have received an executed signature page to this Amendment from each Credit Party, the Agent and each Lender.

(b)Litigation. There shall not exist any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or Governmental Authority

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that challenges this Amendment, any other Loan Document or the extension of credit under the Credit Agreement as amended by this Amendment.

Section 4.    Representations and Warranties of Credit Parties. In order to induce the Agent and the Required Lenders to enter into this Amendment, each Credit Party represents and warrants to Agent and each Lender (which representations and warranties shall survive the execution and delivery of this Amendment), that:

(a) the execution, delivery and performance by each Credit Party of this Amendment has been duly authorized by all necessary corporate action and each of this Amendment and the Credit Agreement, as amended by this Amendment, is a legal, valid and binding obligation of such Credit Party enforceable against such Credit Party in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium and similar laws relating to or affecting the enforceability of creditors’ rights generally, concepts of reasonableness and general equitable principles;

(b) all of the representations and warranties contained in the Credit Agreement and in the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of the date of the effectiveness of this Amendment after giving effect to this Amendment and the waiver and transactions contemplated hereby, except to the extent that such representations or warranties expressly relate to an earlier date (in which event such representations and warranties were true or correct in all material respect (without duplication of any materiality qualifier contained therein) as of such earlier date);

(c) neither the execution, delivery or performance of this Amendment by each Credit Party nor the consummation of the transactions contemplated hereby does or shall (i) contravene the terms of any of that Person’s Organization Documents, (ii) conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or (iii) violate any material Requirement of Law in any material respect; and

(d) other than the Specified Default, no Default or Event of Default has occurred and is continuing or would result immediately after giving effect to this Amendment and the transactions contemplated hereby.

Section 5.    Counterparts; Facsimile Signature. This Amendment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this

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Amendment by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.

Section 6.    Continuing Effect of the Credit Agreement. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Agent under the Credit Agreement and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Credit Parties to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. After the effectiveness of this Amendment, any reference to the Credit Agreement shall mean the Credit Agreement as modified hereby. This Amendment shall constitute a Loan Document.

Section 7.    Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

Section 8.    Captions. The captions and headings of this Amendment are for convenience of reference only and shall not affect the interpretation of this Amendment.

Section 9.    Reaffirmation. The Credit Parties signatory hereto hereby reaffirm their guaranties of the Obligations and reaffirm that the Obligations are and continue to be secured by the security interest granted by the Credit Parties in favor of the Agent under the Collateral Documents (and each Credit Party, as collateral security for the payment and performance when due of the Obligations, hereby mortgages, pledges and hypothecates to the Agent for the benefit of the Secured Parties a Lien on and security interest in, to and under the Collateral of such Credit Party), and all of the terms, conditions, provisions, agreements, requirements, promises, obligations, duties, covenants and representations of the Credit Parties under such documents and agreements entered into with respect to the obligations under the Credit Agreement are incorporated herein by reference and are hereby ratified and affirmed in all respects by the Credit Parties. Each Credit Party acknowledges that all references to “Credit Agreement” and “Obligations” in the Loan Documents shall take into account the provisions of this Amendment and be a reference to the “Credit Agreement” and the “Obligations” as amended hereby.

Section 10.    Post-Closing Covenants. Within sixty (60) days of the Fifth Amendment Effective Time, or such later date as Agent may approve in its sole discretion, Borrower shall provide Agent with satisfactory evidence of the dissolution of Powder Detergents, Inc.

15

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Notwithstanding any provision in the Credit Agreement to the contrary, any default or breach under this Section 10 shall constitute an immediate Event of Default under the Credit Agreement.

(signature pages follow)

16

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

AFFYMETRIX, INC.

By: /s/ Gavin Wood

Name: Gavin Wood

Title: Executive Vice President and Chief Financial Officer

USB CORPORATION

By: /s/ Gavin Wood

Name: Gavin Wood

Title: Chief Financial Officer and Treasurer

POWDER DETERGENTS, INC.

By: /s/ Gavin Wood

Name: Gavin Wood

Title: Chief Financial Officer and Treasurer

EBIOSCIENCE, INC.

By: /s/ Gavin Wood

Name: Gavin Wood

Title: Vice President and Chief Financial Officer

[Signature Page to Limited Waiver and Fifth Amendment to Credit Agreement]

GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and as a Lender 
By: /s/Andrew Moore
Name: Andrew Moore

Title: Its Duly Authorized Signatory

[Signature Page to Limited Waiver and Fifth Amendment to Credit Agreement]

SILICON VALLEY BANK,

as a Lender    

By:        /s/Peter Freyer

Name:    Peter Freyer

Title:    Managing Director

[Signature Page to Limited Waiver and Fifth Amendment to Credit Agreement]

Schedule A

Specified Default

1. The Event of Default under Section 7.1(c) of the Credit Agreement arising from Anatrace, Inc. changing its name to Powder Detergents, Inc. without providing Agent with at least ten (10) days’ prior written notice of such name change and receiving Agent’s acknowledgment that all actions required by Agent to continue the perfection of its Liens had been completed.

Exhibit 1.8(e)

FORM OF EXCESS CASH FLOW CERTIFICATE

AFFYMETRIX, INC.

Date: _______________, 20__

This Excess Cash Flow Certificate (this “Certificate”) is given by Affymetrix, Inc., a Delaware corporation (the “Borrower”), pursuant to subsection 1.8(e) of that certain Credit Agreement, dated as of June 25, 2012, by and among the Borrower, the other Credit Parties, General Electric Capital Corporation, as Agent, and the Lenders (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

The officer executing this Certificate is a Responsible Officer of the Borrower and as such is duly authorized to execute and deliver this Certificate on behalf of the Borrower. By executing this Certificate, such officer hereby certifies to Agent, Lenders and L/C Issuers, on behalf of the Borrower, that:

(a) set forth on Exhibit A hereto is a correct calculation of Excess Cash Flow of the Credit Parties and their Subsidiaries for the year ended [December 31, 20__] and a correct calculation of the required prepayment of

$__________________; and

(b) the calculation set forth on Exhibit A hereto is based on the audited financial statements which have been delivered to Agent in accordance with subsection 4.1(a) of the Credit Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed by one of its Responsible Officers as of the date first written above.

AFFYMETRIX, INC.

By:    ___________________________

Name:    ___________________________

Title:    ___________________________

[Signature Page to Excess Cash Flow Certificate]

EXHIBIT A

TO

EXCESS CASH FLOW CERTIFICATE

Excess Cash Flow is defined as follows:

Cash Flow (per Exhibit 4.2(b) of the Credit Agreement)	$___________
Less:    Scheduled principal payments with respect to Indebtedness actually paid in cash	$___________
Net Interest Expense (per Exhibit 4.2(b) of the Credit Agreement) actually paid in cash	$___________
Increase in Working Capital (defined below)	$___________
All cash losses (less cash gains) in respect of Rate Contracts deducted in calculating net income (or loss) for such period	$___________
All non-cash losses or expenses (or plus non-cash income or gain) included or deducted in calculating net income (or loss) for such period including, without limitation, any non-cash loss or expense (or income or gain) due to the application of FASB ASC 815-10 regarding hedging activity, FASB ASC 350 regarding impairment of goodwill, FASB ASC 480-10 regarding accounting for financial instruments with debt and equity characteristics, non-cash foreign currency exchange losses (or plus gains) and non-cash expenses deducted as a result of any grant of Stock or Stock Equivalents to employees, officers or directors, but excluding any non-cash loss or expense (a) that is an accrual of a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period or (b) relating to a write-down, write off or reserve with respect to Accounts and Inventory except to the extent such write-down, write off or reserve is related to a one-time GAAP-driven write-up of the inventory of Bender MedSystems, Inc. and the inventory of eBioscience Holding Company, Inc. and its Subsidiaries, in each case from cost-based to FMV-based as determined by an independent valuation analysis	$___________

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Fees and expenses incurred in connection with the negotiation, execution and delivery on the Closing Date of the Loan Documents and Related Agreements and consummation on the Closing Date of the Related Transactions, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $12,500,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent	$___________
Settlement costs paid pursuant to the settlement agreement (the “Enzo Settlement Agreement”) with Enzo Life Science, Inc., a wholly-owned subsidiary of Enzo Biochem, Inc., entered into on April 22, 2014, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such costs were incurred on or prior to June 30, 2014 and (iii) such costs do not exceed $5,100,000 in the aggregate	$___________
Fees, settlement costs and expenses incurred in connection with any litigation involving Borrower or any of its Subsidiaries, excluding any amounts paid pursuant to the Enzo Settlement Agreement, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent	$___________
Fees and expenses incurred in connection with Acquisitions (other than the Acquisitions on the Closing Date) and Dispositions (other than Dispositions permitted pursuant to Section 5.2(g) of the Credit Agreement) (in each case, whether or not successful), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent	$___________

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Fees and expenses incurred in connection with severance costs, relocation costs, integration and facilities opening and closing costs, signing costs, retention or completion bonuses, transition costs and restructuring charges or reserves (including restructuring costs related to acquisition after the date hereof and to closure and/or consolidation of facilities), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $7,000,000 in the aggregate in any period of four consecutive Fiscal Quarters (provided, however, that such fees and expenses may be equal to an amount not greater than $11,000,000 for any date of measurement occurring on or after March 31, 2013 and on or prior to September 30, 2013) and (iii) disclosed to Agent	$___________
Plus:    Decrease in Working Capital	$___________
Excess Cash Flow	$___________
Prepayment percent	[25%/0%]*
Subtotal:	$___________
Minus:    Voluntary prepayments of Term Loans	$___________
Prepayment amount	$___________

[*Refer to Section 1.8(e) of the Credit Agreement for a determination of the applicable pre-payment percentage]

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Decrease (increase) in Working Capital, for the purposes of the calculation of Excess Cash Flow, means the following:

	Beg. of Period	End of Period
Current assets:	$___________	$___________
Less (to the extent included in current assets):	$___________	$___________
Cash	$___________	$___________
Cash Equivalents	$___________	$___________
Adjusted current assets	$___________	$___________
Current liabilities:	$___________	$___________
Less (to the extent included in current Liabilities):	$___________	$___________
Revolving Loans	$___________	$___________
Swing Loans	$___________	$___________
Current portion of Indebtedness	$___________	$___________
Adjusted current liabilities	$___________	$___________
Working Capital (adjusted current assets minus adjusted current liabilities)	$___________	$___________
Decrease (Increase) in Working Capital (beginning of period minus end of period Working Capital)	$___________	$___________

To the extent Holdings or any of its Subsidiaries consummates an acquisition during such period, Beginning of Period Working Capital shall be recalculated on a proforma basis to include Working Capital acquired in such acquisition.

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Exhibit 4.2(b)

FORM OF COMPLIANCE CERTIFICATE

AFFYMETRIX, INC.

Date: _______________, 20__

This Compliance Certificate (this “Certificate”) is given by Affymetrix, Inc., a Delaware corporation (the “Borrower”), pursuant to subsection 4.2(b) of that certain Credit Agreement, dated as of June 25, 2012, by and among the Borrower, the other Credit Parties, General Electric Capital Corporation, as Agent, and the Lenders (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

The officer executing this Certificate is a Responsible Officer of the Borrower and as such is duly authorized to execute and deliver this Certificate on behalf of the Borrower. By executing this Certificate, such officer hereby certifies to Agent, the Lenders and the L/C Issuer, on behalf of the Borrower, that:

(a)    the financial statements delivered with this Certificate in accordance with subsection 4.1(a) and/or 4.1(b) of the Credit Agreement are correct and complete and fairly present, in all material respects, in accordance with GAAP the financial position and the results of operations of the Borrower and its Subsidiaries as of the dates of and for the periods covered by such financial statements (subject, in the case of interim financial statements, to normal year-end adjustments and the absence of footnote disclosure);

(b)    to the best of such officer’s knowledge, each Credit Party and each of their Subsidiaries, during the period covered by such financial statements, has observed and performed all of their respective covenants and other agreements in the Credit Agreement and the other Loan Documents to be observed or performed by them, and such officer does not have knowledge of any Default or Event of Default [except as specified on the written attachment hereto];

(c)    Exhibit A hereto is a correct calculation of each of the financial covenants contained in Article VI of the Credit Agreement; and

(d)    since the Closing Date and except as disclosed in prior Compliance Certificates delivered to Agent, no Credit Party and no Subsidiary of any Credit Party has:

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(i)    changed its legal name, identity, jurisdiction of incorporation, organization or formation or organizational structure or formed or acquired any Subsidiary except as follows: ____________________________________;

(ii)    acquired the assets of, or merged or consolidated with or into, any Person, except as follows: _________________________________________________; or

(iii)    changed its address or otherwise relocated, acquired fee simple title to any real property or entered into any real property leases, except as follows: ____________________ _______________________________.

Note: Unless otherwise specified, all financial covenants are calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP and all calculations are without duplication.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed by one of its Responsible Officers as of the date first above written.

AFFYMETRIX, INC.

By:

Name:

Title:

[Signature Page to Compliance Certificate]

EXHIBIT A TO

COMPLIANCE CERTIFICATE

Covenant 6.1 Capital Expenditure Limit

For purposes of Covenant 6.1, Capital Expenditures are defined as follows: The aggregate of all expenditures and obligations, for the relevant test period set forth in Section 6.1 of the Credit Agreement, which should be capitalized under GAAP	$__________
Less: Net Proceeds from Dispositions and/or Events of Loss which a Credit Party is permitted to reinvest pursuant to subsection 1.8(c) and which are included above	$__________
To the extent included above, expenditures financed with cash proceeds from issuances of Stock or Stock Equivalents (other than Disqualified Stock)	$__________
To the extent included above, all insurance proceeds and condemnation awards received on account of any Event of Loss to the extent any such amounts are actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking in connection with such Event of Loss	$__________
To the extent included above, amounts paid as the purchase price for a Target in a Permitted Acquisition	$__________
Capital Expenditures	$__________
Permitted Capital Expenditures	$__________
In Compliance	Yes/No

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Covenant 6.3 Senior Leverage Ratio

Senior Leverage Ratio is defined as follows:
Average of the sum of the aggregate balance of outstanding Revolving Loans and Swing Loans as of the last day of each month in the twelve month (or shorter period commencing on the Closing Date) period ended on the date of measurement	$_________
Plus: L/C Reimbursement Obligations as of date of measurement, whether or not then due and payable	$_________
Outstanding principal balance of the Term Loan as of date of measurement	$_________
Principal portion of Capital Lease Obligations and Indebtedness secured by purchase money Liens as of date of measurement	$_________
Indebtedness evidenced by Convertible Notes as of date of measurement	$_________
Earnouts (valued in accordance with GAAP)	$_________
Without duplication, all other Funded Indebtedness of Holdings and its Subsidiaries as of date of measurement	$_________
Indebtedness	$_________
Less: Without duplication, Subordinated Indebtedness, Convertible Notes and Permitted Convertible Note Refinancings	$_________
Senior Indebtedness	$_________
Adjusted EBITDA for the twelve month period ending on the date of measurement (per Exhibit B)	$_________
Senior Leverage Ratio (SeniorIndebtedness (from above) divided by Adjusted EBITDA)	__________
Maximum Senior Leverage Ratio	__________
In Compliance	Yes/No

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Covenant 6.4 Interest Coverage Ratio

Interest Coverage Ratio is defined as follows:
Cash Flow (per Exhibit B)	$_________
Net Interest Expense (per Exhibit B)	$_________
Interest Coverage Ratio (Cash Flow divided by Net Interest Expense)	_________
Required Interest Coverage Ratio	_________
In Compliance	Yes/No

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EXHIBIT B TO

COMPLIANCE CERTIFICATE

Calculation of EBITDA

EBITDA is defined as follows:
Net income (or loss) for the applicable period of measurement of the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, but excluding: (a) the income (or loss) of any Person which is not a Subsidiary of the Borrower, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries in cash by such Person during such period and the payment of dividends or similar distributions by that Person is not at the time prohibited by operation of the terms of its charter or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Person; (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries; (c) the proceeds of any life insurance policy; (d) gains or losses from the sale, exchange, transfer or other disposition of Property or assets not in the Ordinary Course of Business of the Borrower and its Subsidiaries, and related tax effects in accordance with GAAP; and (e) any other extraordinary gains or losses of the Borrower or its Subsidiaries, and related tax effects in accordance with GAAP	$_________
Plus: All amounts deducted in calculating net income (or loss) for depreciation or amortization for such period	$_________
Interest expense (less interest income) deducted in calculating net income (or loss) for such period	$_________
All taxes on or measured by income to the extent deducted in calculating net income (or loss) for such period	$_________
All losses (less gains) in respect of Rate Contracts deducted in calculating net income (or loss) for such period	$_________

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All non-cash losses or expenses (or minus non-cash income or gain) included or deducted in calculating net income (or loss) for such period including, without limitation, any non-cash loss or expense (or income or gain) due to the application of FASB ASC 815-10 regarding hedging activity, FASB ASC 350 regarding impairment of goodwill, FASB ASC 480-10 regarding accounting for financial instruments with debt and equity characteristics, non-cash foreign currency exchange losses (or minus gains) and non-cash expenses deducted as a result of any grant of Stock or Stock Equivalents to employees, officers or directors, but excluding any non-cash loss or expense (a) that is an accrual of a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period or (b) relating to a write-down, write off or reserve with respect to Accounts and Inventory except to the extent such write-down, write off or reserve is related to a one-time GAAP-driven write-up of the inventory of Bender MedSystems, Inc. and the inventory of eBioscience Holding Company, Inc. and its Subsidiaries, in each case from cost-based to FMV-based as determined by an independent valuation analysis	$_________
Fees and expenses incurred in connection with the negotiation, execution and delivery on the Closing Date of the Loan Documents and Related Agreements and consummation on the Closing Date of the Related Transactions, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $12,500,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent	$_________
Settlement costs paid pursuant to the settlement agreement (the “Enzo Settlement Agreement”) with Enzo Life Science, Inc., a wholly-owned subsidiary of Enzo Biochem, Inc., entered into on April 22, 2014, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such costs were incurred on or prior to June 30, 2014 and (iii) such costs do not exceed $5,100,000 in the aggregate	$_________
Fees, settlement costs and expenses incurred in connection with any litigation involving Borrower or any of its Subsidiaries, excluding any amounts paid pursuant to the Enzo Settlement Agreement, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent	$_________

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Fees and expenses incurred in connection with Acquisitions (other than the Acquisitions on the Closing Date) and Dispositions (other than Dispositions permitted pursuant to Section 5.2(g) of the Credit Agreement) (in each case, whether or not successful), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent	$_________
Fees and expenses incurred in connection with severance costs, relocation costs, integration and facilities opening and closing costs, signing costs, retention or completion bonuses, transition costs and restructuring charges or reserves (including restructuring costs related to acquisition after the date hereof and to closure and/or consolidation of facilities), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $7,000,000 in the aggregate in any period of four consecutive Fiscal Quarters (provided, however, that such fees and expenses may be equal to an amount not greater than $11,000,000 for any date of measurement occurring on or after March 31, 2013 and on or prior to September 30, 2013) and (iii) disclosed to Agent	$_________
EBITDA	$_________

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Calculation of Adjusted EBITDA
EBITDA for the applicable period of measurement	$__________
Plus: with respect to any Target owned, directly or indirectly, by the Credit Parties for which the total consideration paid or payable (including without limitation, all transaction costs, assumed Indebtedness and Liabilities incurred, assumed or reflected on a consolidated balance sheet of the Credit Parties and their Subsidiaries after giving effect to such Acquisition and the maximum amount of all deferred payments, including earnouts but excluding any Stock of the Borrower) was greater than or equal to $3,000,000 and for which the Agent has received financial statements pursuant to subsection 4.1(b) for less than twelve (12) months, Pro Forma EBITDA allocated to each month prior to the acquisition thereof included in the trailing twelve (12) month period for which Adjusted EBITDA is being calculated;	$__________
Minus: with respect to any Material Disposition consummated within the period in question, positive EBITDA (if any) attributable to the Subsidiary, profit centers, or other asset which is the subject of such Material Disposition from the beginning of such period until the date of consummation of such Material Disposition	$__________
Adjusted EBITDA	$__________

“Pro Forma EBITDA” means, with respect to any Target, EBITDA for such Target for the most recent twelve (12) month period preceding the acquisition thereof, adjusted by verifiable expense reductions, including excess owner compensation, if any, which are expected to be realized, in each case calculated on month by month basis by the Credit Parties and consented to by the Agent and Required Lenders. [Note: If more than one Target has been acquired, attach calculations of Pro Forma EBITDA for each Target]

“Material Disposition” means any Disposition for which the total consideration received by the Borrower or any of its Subsidiaries (including, without limitation, all transaction costs, transferred Indebtedness and Liabilities repaid, transferred or no longer reflected on a consolidated balance sheet of the Credit Parties and their Subsidiaries after giving effect to such Disposition and the maximum amount of all deferred payments, including earnouts) exceeds $3,000,000.

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Calculation of Cash Flow
EBITDA for the applicable period of measurement	$_________
Less: Unfinanced Capital Expenditures (per Exhibit B)	$_________
Taxes on or measured by income paid or payable in cash during such period	$_________
Cash Flow (used in calculation of Excess Cash Flow and Interest Coverage Ratio)	$_________

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Calculation of Net Interest Expense
Net Interest Expense
Gross interest expense for such period paid or required to be paid in cash (including all commissions, discounts, fees and other charges in connection with letters of credit and similar instruments and net amounts paid or payable and/or received or receivable under permitted Rate Contracts in respect of interest rates) for Holdings and its Subsidiaries on a consolidated basis	$_________
Less: Interest income for such period	$_________
Net Interest Expense (used in calculation of Interest Coverage Ratio and Excess Cash Flow)	$_________

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Calculation of Unfinanced Capital Expenditures
The aggregate of all expenditures and other obligations for the twelve month period ending on the last day of the month covered by such financial statements which should be capitalized under GAAP	$_________
Less: Net Proceeds from Dispositions and/or Events of Loss which a Credit Party is permitted to reinvest pursuant to subsection 1.8(c) and which are included above	$_________
To the extent included above, expenditures financed with cash proceeds from issuances of Stock or Stock Equivalents (other than Disqualified Stock)	$_________
To the extent included above, all insurance proceeds and condemnation awards received on account of any Event of Loss to the extent any such amounts are actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking in connection with such Event of Loss	$_________
To the extent included above, amounts paid as the purchase price for a Target in a Permitted Acquisition	$_________
Capital Expenditures	$_________
Less: Portion of Capital Expenditures financed under Capital Leases or other Indebtedness (Indebtedness, for this purpose, does not include drawings under the Revolving Loan Commitment)	$_________
Unfinanced Capital Expenditures (used in calculation of Cash Flow)	$_________

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EX-31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Frank Witney, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Affymetrix, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 4, 2014	/s/ FRANK WITNEY
	Name:	Frank Witney
	Title:	Director, President and Chief Executive Officer

EX-31.2

Certification of Chief Financial Officer
Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Gavin Wood, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Affymetrix, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 4, 2014	/s/ GAVIN WOOD
	Name:	Gavin H. J. Wood
	Title:	Executive Vice President and Chief Financial Officer

EX-32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with this Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Each of the undersigned certifies that, to his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Affymetrix, Inc.

August 4, 2014	/s/ FRANK WITNEY
	Name:	Frank Witney
	Title:	Director, President and Chief Executive Officer
	/S/ GAVIN WOOD
	Name:	Gavin H. J. Wood
	Title:	Executive Vice President and Chief Financial Officer

This certification accompanying the Report is not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities such Section, and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before, on or after the date of the Report), irrespective of any general incorporation language contained in such filing.

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STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE Share-based Compensation Expense (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Recognized share-based compensation expense [Abstract]
Total stock-based compensation expense	$ 3,127	$ 1,276	$ 6,272	$ 3,110
Costs of product sales [Member]
Recognized share-based compensation expense [Abstract]
Total stock-based compensation expense	660	262	1,197	429
Research and development [Member]
Recognized share-based compensation expense [Abstract]
Total stock-based compensation expense	637	202	1,144	531
Selling, general and administrative [Member]
Recognized share-based compensation expense [Abstract]
Total stock-based compensation expense	$ 1,830	$ 812	$ 3,931	$ 2,150

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NET LOSS PER COMMON SHARE (Details) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	26,822	27,404	26,778	27,415
Employee stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,540	5,646	4,540	5,646
Employee stock purchase plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	89	14	45	14
Restricted stock and restricted stock units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,336	3,887	4,336	3,887
Convertible notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	17,857	17,857	17,857	17,868

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LONG-TERM DEBT OBLIGATIONS, Term Loan Maturities (Details) (Secured Debt [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Secured Debt [Member]
Debt Instrument [Line Items]
2014, remainder thereof	$ 0
2015	0
2016	0
2017	2,150
2018	22,800
Total debt	$ 24,950

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FAIR VALUE MEASUREMENTS CHANGES IN FAIR VALUE MEASUREMENT OF LEVEL 3 ITEMS (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance as of December 31, 2013	$ 4,139	$ 4,383	$ 4,383
Sales			(2,162)
Realized gain (loss)			1,240
Unrealized gain (loss)			678
Balance as of June 30, 2014	$ 4,139	$ 4,383	$ 4,139

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WARRANTIES (Tables)

6 Months Ended

Jun. 30, 2014

Product Warranties Disclosures [Abstract]

Changes in entity's product warranty liability

Changes to the Company’s product warranty liability for the six months ended June 30, 2014 are as follows (in thousands):

Balance at December 31, 2013	$	1,697
Additions charged to cost of product sales	339
Repairs and replacements	(395		)
Adjustments	(183		)
Balance at June 30, 2014	$	1,458

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INCOME TAXES (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 402,000	$ 521,000	$ 674,000	$ 1,196,000
Change in valuation allowance	100,000		(100,000)
Tax benefits related to the lapses of statues of limitations	300,000		300,000
Unrecognized tax benefits, period increase			300,000
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound	$ 1,800,000		$ 1,800,000

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INVENTORIES, Fair Value Step-Up in Basis (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Inventory Disclosure [Abstract]
Amortization of inventory step-up in fair value	$ 4,666	$ 9,084

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DERIVATIVE FINANCIAL INSTRUMENTS Gain (Loss) by Hedging Relationship (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Derivatives in cash flow hedging relationships [Member]
Effect of derivative instruments on statements of operations [Abstract]
Net (loss) gain recognized in OCI, net of tax	$ (181)	[1]	$ (361)	[1]	$ (478)	[1]	$ 725	[1]
Net (loss) gain reclassified from accumulated OCI into Revenue, net of tax	(314)	[2]	254	[2]	(758)	[2]	1,081	[2]
Net (loss) gain reclassified from accumulated OCI into Interest income and other, net, net of tax	(7)	[3]	0	[3]	(17)	[3]	158	[3]
Net (loss) gain recognized in Interest income and other, net, net of tax	19	[4]	30	[4]	1	[4]	45	[4]
Derivatives not designated as hedging relationships [Member]
Effect of derivative instruments on statements of operations [Abstract]
Net gain recognized in Interest income and other, net, net of tax	$ 11	[5]	$ 4	[5]	$ 12	[5]	$ 147	[5]

[1] Net change in the fair value of the effective portion classified in OCI

[2] Effective portion classified as Revenue

[3] Ineffective portion classified as Interest income and other, net

[4] Amount excluded from effectiveness testing classified as Interest income and other, net

[5] Classified in Interest income and other, net

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RELATED PARTY TRANSACTIONS (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Related Party Transactions [Abstract]
Minimum royalty fee from related party	$ 100,000

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LONG-TERM DEBT OBLIGATIONS, Convertible Senior Notes (Details) (4.00% Convertible Senior Notes, USD $)	0 Months Ended		3 Months Ended	6 Months Ended
	Jul. 25, 2012	Jun. 25, 2012	Jun. 30, 2014	Jun. 30, 2014
4.00% Convertible Senior Notes
Debt Instrument [Line Items]
Senior Notes		$ 105,000,000.0	$ 105,000,000	$ 105,000,000
Stated interest rate		4.00%
Debt issuance costs		3,900,000
Net proceeds from issuance of 4.00% convertible senior notes		101,100,000
Amortization period for debt issuance cost related to convertible notes		7 years
Debt Instrument, Convertible, Shares per $1,000 principal amount of 4.00% Convertible Senior Notes	170.0319
Aggregate principal amount of senior convertible notes repurchased		1,000
Maximum number of shares upon conversion of the 4.00% Notes		17,857,143
Debt Instrument, Convertible, Conversion Price		$ 5.88
Percentage of common stock above conversion price (in hundredths)		130.00%
Number of consecutive trading days within measurement period		20 days
Number of consecutive trading days on which trading price is examined for triggering of conversion		30 days
Number of trading days to trigger measurement period within date company provides notice of redemption		5 days
Percentage of Principal Amount That The Redemption Price Will Be Equal To		100.00%
Debt Instrument, 4.00% Convertible, Interest Expense			$ 1,200,000	$ 2,400,000

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DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

The Company derives a portion of its revenues in foreign currencies, predominantly in Europe and Japan, as part of its ongoing business operations. In addition, a portion of its assets are held in the foreign currencies of its subsidiaries. The Company enters into foreign currency forward contracts to manage a portion of the volatility related to transactions that are denominated in foreign currencies. The Company’s foreign currency forward contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions that are independent of those exposures. The Company’s accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company records all derivatives on the accompanying Condensed Consolidated Balance Sheets at fair value. The effective portions of designated cash flow hedges are recorded in OCI until the hedged item is recognized in operations. As of June 30, 2014, the Company’s existing foreign currency forward exchange contracts mature within 12 months. The deferred amount related to the Company’s derivatives recorded in OCI at June 30, 2014, and expected to be recognized into earnings over the next 12 months is a net loss of $0.3 million. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through operations.

Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in association with such derivative instruments are reclassified immediately into operations through Interest income and other, net on the Condensed Consolidated Statement of Operations. Any subsequent changes in fair value of such derivative instruments are reflected in Interest income and other, net unless they are re-designated as hedges of other transactions. The Company recognized less than $0.1 million related to the loss of hedge designation on cash flow hedges related to the Euro that were deemed ineffective due to lower-than-forecasted revenue from Europe for the six months ended June 30, 2014. No additional hedges are deemed ineffective as of June 30, 2014. During the six months ended June 30, 2013, the Company recognized $0.1 million in net gains in Interest income and other, net, related to the loss of hedge designation on a portion of cash flow hedges related to the Japanese yen that were deemed ineffective due to lower-than-forecasted revenue from Japan.

Under the Credit Agreement as defined in Note 7, "Long-Term Debt Obligations", the Company is required to maintain derivative contracts to protect against fluctuations in interest rates with respect to at least 35% of the aggregate principal amount of the Term Loan then outstanding, with such derivative contracts being required to have at least a three-year term. Accordingly, the Company maintains an interest rate swap (the "Interest Rate Swap") to comply with the requirements of the Credit Agreement. The Interest Rate Swap calls for fixed rate quarterly payments of 0.61% of the notional amount in exchange for a variable rate quarterly receipt equal to a 3-month LIBOR rate. The Interest Rate Swap terminates on June 25, 2015.

The Company did not designate the Interest Rate Swap as a hedging instrument and will recognize adjustments to fair value through Interest income and other, net on the accompanying Condensed Consolidated Statements of Operations at each reporting date. As of June 30, 2014, the fair value of the Interest Rate Swap was less than $0.1 million.

As of June 30, 2014 and December 31, 2013, the total notional values of the Company’s derivative assets and liabilities were as follows (in thousands):

	June 30, 2014		December 31, 2013
Euro	$	14,714	$	21,990
Japanese Yen	3,630		4,588
British Pound	3,925		5,653
Interest rate swap	10,307		10,307
Total	$	32,576	$	42,538

Other than the Interest Rate Swap, the Company did not have any derivative assets or liabilities that were not designated or qualifying as hedges as of June 30, 2014 and December 31, 2013.

The Company is exposed to the risk that the counterparties to its hedges may be unable to meet the terms of these agreements. To mitigate the risk, only contracts with carefully selected highly-rated major financial institutions are entered into. In the event of non-performance by these counterparties, the asset position carrying values of the financial instruments represent the maximum amount of loss that can be incurred; however, no losses as a result of counterparty defaults are expected. The Company does not require and is not required to pledge collateral for these financial instruments. The Company does not enter into foreign currency forward contracts for trading or speculative purposes and is not party to any leveraged derivative instruments.

The following table shows the Company’s foreign currency derivative measures at fair value as reflected on the accompanying Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014		December 31, 2013		Balance Sheet Classification
Derivative assets:
Foreign exchange contracts	$	7	$	185	Prepaid expenses and other current assets
Derivative liabilities:
Foreign exchange contracts	296		927		Accounts payable and accrued liabilities
Interest rate swap	22		11		Other long-term liabilities

The following table shows the effect, net of tax, of the Company’s derivative instruments on the accompanying Condensed Consolidated Statements of Operations and OCI for the three and sixmonths endedJune 30, 2014and 2013 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Derivatives in cash flow hedging relationships:
Net (loss) gain recognized in OCI, net of tax (1)	$	(181	)	$	(361	)	$	(478	)	$	725
Net (loss) gain reclassified from accumulated OCI into Revenue, net of tax (2)	(314		)	254			(758		)	1,081
Net (loss) gain reclassified from accumulated OCI into Interest income and other, net, net of tax (3)	(7		)	—			(17		)	158
Net gain recognized in Interest income and other, net, net of tax (4)	19			30			1			45
Derivatives not designated as hedging relationships:
Net gain recognized in Interest income and other, net, net of tax (5)	11			4			12			147

(1) Net change in the fair value of the effective portion classified in OCI

(2) Effective portion classified as Revenue

(3) Ineffective portion classified as Interest income and other, net

(4) Amount excluded from effectiveness testing classified as Interest income and other, net

(5) Classified in Interest income and other, net

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WARRANTIES (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Changes in Entity's Product Warranty Liability [Abstract]
Product warranty, beginning balance	$ 1,697
Additions charged to cost of product sales	339
Repairs and replacements	(395)
Adjustments	(183)
Product warranty, ending balance	$ 1,458

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SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following table shows revenue and loss from operations by reportable operating segment for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue:
Affymetrix Core	$	62,085		$	57,237		$	121,532		$	113,157
eBioscience	23,347			22,227			46,871			44,252
Totals	$	85,432		$	79,464		$	168,403		$	157,409
Loss from operations:
Affymetrix Core	$	854		$	265		$	(6,734	)	$	(7,789	)
eBioscience	(1,158		)	(3,216		)	(2,311		)	(7,368		)
Totals	$	(304	)	$	(2,951	)	$	(9,045	)	$	(15,157	)

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Future minimum lease obligations, net of sublease income, as of June 30, 2014 under the two leases mentioned above are as follows (in thousands):

For the Year Ending December 31,	Amount
2014, remainder thereof	$	—
2015	780
2016	2,324
2017	2,393
2018	2,462
Thereafter	11,242
Total	$	19,201

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LONG-TERM DEBT OBLIGATIONS LONG-TERM DEBT OBLIGATIONS, Schedule of Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Total debt	$ 129,950	$ 144,450
Less: current portion of long-term debt	4,000	12,750
Total long-term debt	125,950	131,700
Term Loan [Member]
Debt Instrument [Line Items]
Total debt	24,950	29,450
Line of Credit [Member]
Debt Instrument [Line Items]
Total debt	0	10,000
Convertible Debt [Member]
Debt Instrument [Line Items]
Total debt	$ 105,000	$ 105,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Total accumulated other comprehensive income, net of tax, beginning balance	$ 8,392,000
(Decrease)/ Increase	1,216,000
Total accumulated other comprehensive income, net of tax, ending balance	8,833,000
Income tax expense	500,000
Foreign currency translation adjustment
Total accumulated other comprehensive income, net of tax, beginning balance	7,784,000
(Decrease)/ Increase	(458,000)
Total accumulated other comprehensive income, net of tax, ending balance	7,326,000
Unrealized change in non-marketable securities
Total accumulated other comprehensive income, net of tax, beginning balance	1,373,000
(Decrease)/ Increase	421,000	[1]
Total accumulated other comprehensive income, net of tax, ending balance	1,794,000
Unrealized change in cash flow hedges
Total accumulated other comprehensive income, net of tax, beginning balance	(765,000)
(Decrease)/ Increase	1,253,000
Total accumulated other comprehensive income, net of tax, ending balance	(287,000)
Reclassification Adjustments
Reclassification Adjustments	(775,000)
Reclassification Adjustments | Foreign currency translation adjustment
Reclassification Adjustments	0
Reclassification Adjustments | Unrealized change in non-marketable securities
Reclassification Adjustments	0
Reclassification Adjustments | Unrealized change in cash flow hedges
Reclassification Adjustments	$ (775,000)

[1] Amounts of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, were not material except for the increase in unrealized gain in non-marketable securities that is net of a $0.5 million income tax expense.

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FAIR VALUE MEASUREMENTS Schedule of Fair Value Hierarchy (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 7	$ 185
Non-marketable securities	4,139	4,383
Total assets	4,146	4,568
Derivatives liabilities	318	938
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	7	185
Total assets	7	185
Derivatives liabilities	318	938
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-marketable securities	4,139	4,383
Total assets	$ 4,139	$ 4,383

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2014 and December 31, 2013, the assets and liabilities measured at fair value consisted of the following (in thousands):

	June 30, 2014						December 31, 2013
	Fair Value Measurements Using Input Types						Fair Value Measurements Using Input Types
	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Derivative assets	$	7	$	—	$	7	$	185	$	—	$	185
Non-marketable securities	—		4,139		4,139		—		4,383		4,383
Total assets	$	7	$	4,139	$	4,146	$	185	$	4,383	$	4,568
Liabilities:
Derivatives liabilities	$	318	$	—	$	318	$	938	$	—	$	938

Derivative financial instruments

The Company's derivative financial instruments are measured at fair value on a recurring basis utilizing Level 2 inputs as determined based on review of third-party sources. The fair value of the Company's derivative assets and liabilities is determined based on the estimated consideration the Company would pay or receive to terminate these agreements on the reporting date. The derivative assets and liabilities are located in Prepaid expenses and other current assets and Accounts payable and accrued expenses, respectively, in the accompanying Condensed Consolidated Balance Sheets.

Non-Marketable Securities

The Company believes the carrying amounts of its non-marketable securities approximated their fair values at the dates presented above. These non-marketable securities consist of an investment in a limited partnership investment fund that invests in companies in the life science industry and are located in the United States. The investments were initially valued at purchase price and subsequently on the basis of inputs that market participants would use in pricing such investments. The portfolio of investments includes Level 1 publicly-traded equity securities and Level 3 equity securities and notes.

During the year ended December 31, 2013, other-than-temporary impairment charges of $0.5 million were recognized on the Company's non-marketable securities. There was no other-than-temporary impairment during the six months ended June 30, 2014. Net investment losses are included in Interest income and other, net in the accompanying Consolidated Statements of Operations. Depending on market conditions, the Company may incur additional charges on this investment in the future.

The following table summarizes the change in the fair value of the Company's non-marketable securities during the six months ended June 30, 2014 (in thousands).

Balance as of December 31, 2013	$	4,383
Sales	(2,162		)
Realized gain (loss)	1,240
Unrealized gain (loss)	678
Balance as of June 30, 2014	$	4,139

Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-term debt obligations as discussed in Note 7, "Long-Term Debt Obligations", are not measured at fair value on a recurring basis and are carried at amortized cost. The Company believes the fair values of the Term Loan approximates its carrying values, or amortized cost, due to the short-term nature of these obligations and the market rates of interest rates they bear. Such inputs are classified as Level 3 of the fair value hierarchy. The fair value of the Company’s 4.00% Notes is based on quoted market prices as of the respective balance sheet date, and therefore is classified as Level 1 of the fair value hierarchy. As of June 30, 2014, the fair value of the Company’s 4.00% Notes was approximately $180.7 million.

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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other than Temporary Impairment Losses, Investments	$ 0	$ 500,000
4.00% Convertible Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Stated interest rate	4.00%
Convertible debt fair value	$ 180,700,000

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STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE Performance-Based Awards Narrative (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	$ 17.8
Performance-Based Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding	1,194,100
Average grant date fair value	$ 5.93
PRSU's expected to vest	874,686
Unrecognized share-based compensation expense	$ 2.9
Period for recognition	4 years
Performance-Based Awards [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	6 months
Performance-Based Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

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RESTRUCTURING (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Restructuring and Related Activities [Abstract]
Restructuring and related cost, expected cost	$ 4.5

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 51,500	$ 57,128
Accounts receivable, net	49,631	50,862
Inventories—short-term portion	54,043	58,059
Deferred tax assets—short-term portion	1,613	767
Prepaid expenses and other current assets	6,567	8,920
Total current assets	163,354	175,736
Property and equipment, net	16,906	18,671
Inventories—long-term portion	6,001	5,972
Goodwill	161,201	161,595
Intangible assets, net	119,814	131,108
Deferred tax assets—long-term portion	368	355
Other long-term assets	10,583	11,074
Total assets	478,227	504,511
Current liabilities:
Accounts payable and accrued liabilities	42,891	45,534
Current portion of long-term debt	4,000	12,750
Deferred revenue—short-term portion	12,681	18,660
Total current liabilities	59,572	76,944
Deferred revenue—long-term portion	2,670	2,824
Convertible notes	105,000	105,000
Term loan—long-term portion	20,950	26,700
Other long-term liabilities	21,182	21,496
Total liabilities	209,374	232,964
Stockholders’ equity:
Common stock	732	723
Additional paid-in capital	776,390	768,149
Accumulated other comprehensive income	8,833	8,392
Accumulated deficit	(517,102)	(505,717)
Total stockholders’ equity	268,853	271,547
Total liabilities and stockholders’ equity	$ 478,227	$ 504,511

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LONG-TERM DEBT OBLIGATIONS, Term Loan and Revolving Credit Facility Narrative (Details) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended			0 Months Ended									0 Months Ended			0 Months Ended		0 Months Ended			1 Months Ended				1 Months Ended		0 Months Ended		1 Months Ended
	Jun. 25, 2012	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 4.00% Convertible Senior Notes	Oct. 17, 2013 Base Rate [Member] Minimum [Member]	Oct. 17, 2013 Base Rate [Member] Maximum [Member]	Oct. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Debt Instrument, Redemption, Period One [Member]	Oct. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Debt Instrument, Redemption, Period Two [Member]	Oct. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Debt Instrument, Redemption, Period Three [Member]	Oct. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Debt Instrument, Redemption, Period Four [Member]	Oct. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Minimum [Member]	Oct. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Maximum [Member]	Jun. 25, 2012 Term Loan and Revolving Credit Facility [Member]	Jun. 25, 2012 Term Loan [Member]	Jun. 30, 2014 Term Loan [Member]	Oct. 17, 2013 Term Loan [Member]	Oct. 17, 2013 Revolving Credit Facility [Member]	Jun. 25, 2012 Revolving Credit Facility [Member]	Jun. 25, 2012 Refinanced Term Loan [Member]	Oct. 17, 2013 Refinanced Term Loan [Member]	Jun. 25, 2012 Senior Secured Credit Facility [Member]	Oct. 31, 2013 Senior Secured Credit Facility [Member] Interest Period Option 1 [Member]	Oct. 31, 2013 Senior Secured Credit Facility [Member] Interest Period Option 2 [Member]	Oct. 31, 2013 Senior Secured Credit Facility [Member] Minimum [Member]	Oct. 17, 2013 Senior Secured Credit Facility [Member] Minimum [Member]	Oct. 31, 2013 Senior Secured Credit Facility [Member] Maximum [Member]	Oct. 17, 2013 Senior Secured Credit Facility [Member] Maximum [Member]	Oct. 17, 2013 Senior Secured Credit Facility [Member] Federal Funds Rate [Member]	Oct. 17, 2013 Senior Secured Credit Facility [Member] London Interbank Offered Rate (LIBOR) [Member]	Oct. 31, 2013 Senior Secured Credit Facility [Member] London Interbank Offered Rate (LIBOR) [Member]	Jul. 28, 2014 Subsequent Event [Member]
Debt Instrument [Line Items]
Current portion of long-term debt		$ 4,000,000	$ 4,000,000	$ 12,750,000
Debt term															5 years			5 years
Face amount														100,000,000.0	85,000,000.0			10,000,000.0			38,000,000.0
Original revolving credit facility																			15,000,000.0
Debt outstanding																	38,000,000	10,000,000
Basis spread on variable rate						1.50%	1.75%					2.50%	2.75%																0.50%	1.00%
Number of days in a year used to calculate rate																									365 days		366 days				360 days
Sum of LIBOR interest period																														1 month
Sum of LIBOR interest period advance determination								1 month	2 months	3 months	6 months
Term of debt used to determine interest rate																							9 years	12 years
Interest rate at period end		4.38%	4.38%
Uncommitted incremental term loan facility capacity																																50,000,000
Interest coverage ratio																										3.5
Senior leverage ratio																										1.20		1.75
Minimum prepayment percentage of excess cash flow																						50.00%
Minimum prepayment percentage of net cash proceeds of issuances or incurrences of debt obligations																						100.00%
Minimum prepayment percentage of net proceeeds of asset sales over threshold amount																						100.00%
Net proceeds of asset sales threshold to trigger prepayment																						2,500,000
Stated interest rate					4.00%
Debt-related covenants			As of June 30, 2014, the Company was in compliance with the covenants.
Debt issuance cost related to term loan	4,500,000
Amortization period For debt issuance cost term loan	5 years
Debt issuance cost															2,500,000					800,000
Outstanding principal balance of term loan as of balance sheet date		25,000,000	25,000,000
Interest expense incurred		400,000	1,000,000
Outstanding balance under revolving credit facility		$ 0	$ 0
Annual amortization year one																10.00%
Amortization year two																10.00%
Amortization year three																10.00%
Amortization year four																10.00%
Amortization year five and after																60.00%

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (11,385)	$ (21,543)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	16,521	20,427
Amortization of inventory step-up in fair value	4,666	9,084
Share-based compensation	6,272	3,110
Deferred tax, net	(570)	0
Available-for-sale Securities, Gross Realized Gain (Loss), Excluding Other than Temporary Impairments	(1,240)	(50)
Other non-cash transactions	356	529
Changes in operating assets and liabilities:
Accounts receivable, net	1,339	6,253
Inventories	(1,207)	(1,128)
Prepaid expenses and other assets	1,883	1,704
Accounts payable and accrued liabilities	(2,599)	(5,796)
Deferred revenue	(6,136)	10,783
Other long-term liabilities	(266)	(1,661)
Net cash provided by operating activities	7,634	21,712
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of available-for-sale securities	2,162	9,364
Proceeds on sale of fixed assets	106	0
Capital expenditures	(3,036)	(2,271)
Purchase of non-marketable investment	0	(200)
Purchase of technology rights	0	(440)
Net cash (used in) provided by investing activities	(768)	6,453
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock, net	1,978	521
Repayments of long term debt	(14,500)	(6,376)
Bond and loan issuance costs	0	(228)
Repurchase of 3.50% senior convertible notes	0	(3,855)
Net cash used in financing activities	(12,522)	(9,938)
Effect of exchange rate changes on cash and cash equivalents	28	(224)
Net increase in cash and cash equivalents	(5,628)	18,003
Cash and cash equivalents at beginning of period	57,128	25,671
Cash and cash equivalents at end of period	$ 51,500	$ 43,674

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DERIVATIVE FINANCIAL INSTRUMENTS Schedule of Total Notional Values (Details) (Net Investment Hedging [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Derivative [Line Items]
Notional amount of derivative	$ 32,576	$ 42,538
Euro [Member]
Derivative [Line Items]
Notional amount of derivative	14,714	21,990
Japanese Yen [Member]
Derivative [Line Items]
Notional amount of derivative	3,630	4,588
British Pound [Member]
Derivative [Line Items]
Notional amount of derivative	3,925	5,653
Interest rate swap [Member]
Derivative [Line Items]
Notional amount of derivative	$ 10,307	$ 10,307

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional values of entity's foreign currency forward contracts mature within 12 months

As of June 30, 2014 and December 31, 2013, the total notional values of the Company’s derivative assets and liabilities were as follows (in thousands):

	June 30, 2014		December 31, 2013
Euro	$	14,714	$	21,990
Japanese Yen	3,630		4,588
British Pound	3,925		5,653
Interest rate swap	10,307		10,307
Total	$	32,576	$	42,538

Entity's foreign currency derivatives measured at fair value

The following table shows the Company’s foreign currency derivative measures at fair value as reflected on the accompanying Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014		December 31, 2013		Balance Sheet Classification
Derivative assets:
Foreign exchange contracts	$	7	$	185	Prepaid expenses and other current assets
Derivative liabilities:
Foreign exchange contracts	296		927		Accounts payable and accrued liabilities
Interest rate swap	22		11		Other long-term liabilities

Effect of entity's derivative instruments, net of tax, on Condensed Statements of Operations

The following table shows the effect, net of tax, of the Company’s derivative instruments on the accompanying Condensed Consolidated Statements of Operations and OCI for the three and sixmonths endedJune 30, 2014and 2013 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Derivatives in cash flow hedging relationships:
Net (loss) gain recognized in OCI, net of tax (1)	$	(181	)	$	(361	)	$	(478	)	$	725
Net (loss) gain reclassified from accumulated OCI into Revenue, net of tax (2)	(314		)	254			(758		)	1,081
Net (loss) gain reclassified from accumulated OCI into Interest income and other, net, net of tax (3)	(7		)	—			(17		)	158
Net gain recognized in Interest income and other, net, net of tax (4)	19			30			1			45
Derivatives not designated as hedging relationships:
Net gain recognized in Interest income and other, net, net of tax (5)	11			4			12			147

(1) Net change in the fair value of the effective portion classified in OCI

(2) Effective portion classified as Revenue

(3) Ineffective portion classified as Interest income and other, net

(4) Amount excluded from effectiveness testing classified as Interest income and other, net

(5) Classified in Interest income and other, net

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DERIVATIVE FINANCIAL INSTRUMENTS Entity's foreign currency derivatives measured at fair value (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Foreign exchange contracts [Member] | Prepaid expenses and other current assets [Member]
Derivative [Line Items]
Derivative assets:	$ 7	$ 185
Foreign exchange contracts [Member] | Accounts payable and accrued liabilities [Member]
Derivative [Line Items]
Derivative liabilities:	296	927
Interest rate swap [Member] | Accounts payable and accrued liabilities [Member]
Derivative [Line Items]
Derivative liabilities:	$ 22	$ 11

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INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventories

At June 30, 2014 and December 31, 2013, inventories consisted of the following (in thousands):

	June 30, 2014		December 31, 2013
Raw materials	$	12,447	$	11,587
Work-in-process	17,878		22,139
Finished goods	29,719		30,305
Total	$	60,044	$	64,031
Short-term portion	$	54,043	$	58,059
Long-term portion	$	6,001	$	5,972

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of Affymetrix, Inc. and its wholly-owned subsidiaries (“Affymetrix” or the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments, consisting of normal recurring entries, considered necessary for a fair presentation have been included.

Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited financial statements should be read in conjunction with the Company's audited financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, from which the balance sheet information as of that date and as included herein was derived.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net loss and other comprehensive income (loss) (“OCI”). OCI includes foreign currency translation adjustments, unrealized gains and losses on the Company's non-marketable securities that are excluded from net loss and unrealized gains and losses on cash flow hedges. Total comprehensive loss has been disclosed in the Company's Condensed Consolidated Statements of Comprehensive Loss.

The following table summarizes the amounts reclassified out of accumulated other comprehensive income, net of tax, for the six months ended June 30, 2014 (in thousands):

	December 31, 2013			(Decrease)/ Increase					Reclassification Adjustments			June 30, 2014
Foreign currency translation adjustment	$	7,784		$	(458	)			$	—		$	7,326
Unrealized change in non-marketable securities	1,373			421			(1	)	—			1,794
Unrealized change in cash flow hedges	(765		)	1,253					(775		)	(287		)
Total accumulated other comprehensive income, net of tax	$	8,392		$	1,216				$	(775	)	$	8,833

(1) Amounts of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, were not material except for the increase in unrealized gain in non-marketable securities that is net of a $0.5 million income tax expense.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09) to provide guidance on revenue recognition. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company in the first quarter of 2017. Early adoption is not permitted. Upon adoption, ASU 2014-09 can be applied retrospectively to all periods presented or only to the most current period presented with the cumulative effect of changes reflected in the opening balance of retained earnings in the most current period presented. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
REVENUE:
Product sales	$ 75,880	$ 74,170	$ 149,576	$ 145,728
Services and other	9,552	5,294	18,827	11,681
Total revenue	85,432	79,464	168,403	157,409
COSTS AND EXPENSES:
Cost of product sales	30,560	33,587	60,071	68,021
Cost of services and other	6,028	3,706	12,932	7,213
Research and development	12,882	11,959	24,517	24,207
Selling, general and administrative	36,266	33,518	74,828	68,638
Litigation settlement	0	0	5,100	0
Restructuring charges	0	(355)	0	4,487
Total costs and expenses	85,736	82,415	177,448	172,566
Loss from operations	(304)	(2,951)	(9,045)	(15,157)
Interest income and other, net	1,418	89	1,711	432
Interest expense	1,623	2,724	3,377	5,622
Loss before income taxes	(509)	(5,586)	(10,711)	(20,347)
Income tax provision	402	521	674	1,196
Net loss	$ (911)	$ (6,107)	$ (11,385)	$ (21,543)
Basic and diluted net loss per common share (in dollars per share)	$ (0.01)	$ (0.09)	$ (0.16)	$ (0.30)
Shares used in computing basic and diluted net loss per common share	72,944	71,154	72,722	71,038

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company reports segment information on the "management" approach which designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments. The Company has determined that its Chief Executive Officer is the Company's chief operating decision maker ("CODM") as he is responsible for reviewing and approving investments in the Company's technology platforms and manufacturing infrastructure.  The Company is organized in two reportable segments: Affymetrix Core and eBioscience.

Affymetrix Core is divided into four business units, with each business unit having its own strategic Marketing and Research and Development groups to better serve customers and respond quickly to the market needs.  Affymetrix Core manufacturing operations are based on platforms that are used to produce various Affymetrix products that serve multiple applications and markets and similar customer and economic characteristics. Additionally, the business units share certain research, development and common corporate services that provide capital, infrastructure and functional support. As such, the Company has concluded that the four business units represent one reportable operating segment. The following describes the four business units that form Affymetrix Core:

• Expression: This business unit markets the Company's GeneChip® gene expression products and services;

• Genetic Analysis and Clinical Applications: This business unit markets the Company's rapidly growing Axiom® genotyping product line, as well as products with clinical diagnostic and research applications including the CytoScan® and OncoScan products, as well as the QuantiGene ViewRNA in-situ hybridization platform for clinical translational research. In addition, the business unit is responsible for development and marketing of the Powered-by-Affymetrix (PbA) clinical partnering and licensing program which enables third-party diagnostic companies to access and develop DNA and RNA-based diagnostic tests on Affymetrix technology platforms. This business unit also markets the CytoScan Dx product, the recently FDA approved microarray system for post natal diagnostics of children with developmental delays and disorders;

• Life Science Reagents: This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers and other tool provider businesses, including those developing and marketing Next Generation Sequencing products and molecular diagnostics; and

• Corporate: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from field-services provided to customers of the Company.

The eBioscience business unit operates with its own manufacturing, research and marketing groups. The eBioscience business unit does utilize certain Corporate functions such as finance, legal and human resources. This reportable segment specializes in the areas of flow cytometry reagents, immunoassays, microscopic imaging, other protein-based analyses, QuantiGene single and multiplex RNA solution assays (not including the QuantiGeneRNA View in-situ hybridization platform) and Procarta multiplex immunoassay product lines.

eBioscience began integrating the development and marketing of the QuantiGene (excluding the QuantiGene ViewRNA in-situ hybridization platform) and Procarta product lines during 2013 with full integration in 2014. These products were previously reported by the Expression Business Unit of the Affymetrix Core reportable segment.  Accordingly, segment information for prior periods has been restated to reflect these changes for purposes of comparability. 

The Company evaluates the performance of its reportable segments based on revenue and income (loss) from operations. Revenue is allocated to each business unit based on product codes. The eBioscience business is operated on a stand-alone basis.

The following table shows revenue and loss from operations by reportable operating segment for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue:
Affymetrix Core	$	62,085		$	57,237		$	121,532		$	113,157
eBioscience	23,347			22,227			46,871			44,252
Totals	$	85,432		$	79,464		$	168,403		$	157,409
Loss from operations:
Affymetrix Core	$	854		$	265		$	(6,734	)	$	(7,789	)
eBioscience	(1,158		)	(3,216		)	(2,311		)	(7,368		)
Totals	$	(304	)	$	(2,951	)	$	(9,045	)	$	(15,157	)

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	AFFYMETRIX INC
Entity Central Index Key	0000913077
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		73,381,698

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

In December 2011, the Company entered into an agreement under which it assigned one patent application and related know-how to Cellular Research, Inc. (“Cellular Research”), a company founded by the Company’s Chairman, Dr. Stephen P.A. Fodor. Dr. Fodor also owns a majority of the shares of Cellular Research. Pursuant to the agreement, Cellular Research shall pay single digit royalties to Affymetrix on sales of products covered by the assigned technology, and starting in December 2015, an annual minimum fee of $100,000. Affymetrix shall also have a right of first refusal to collaborate with Cellular Research for the development of certain new products and to supply arrays to Cellular Research under certain terms and conditions. As of June 30, 2014, no significant royalties had been earned from this agreement.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ (911)	$ (6,107)	$ (11,385)	$ (21,543)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(609)	1,268	(458)	(1,856)
Unrealized change in available-for-sale and non-marketable securities (net of tax of $(545) and $256 for the three and six months ended June 30, 2014, respectively)	(898)	(55)	421	(331)
Unrealized change in cash flow hedges	181	(361)	478	727
Net change in other comprehensive (loss) income, net of tax	(1,326)	852	441	(1,460)
Comprehensive loss	$ (2,237)	$ (5,255)	$ (10,944)	$ (23,003)

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WARRANTIES

6 Months Ended

Jun. 30, 2014

Product Warranties Disclosures [Abstract]

WARRANTIES

WARRANTIES

The Company provides for anticipated warranty costs at the time the associated product revenue is recognized. Accrued warranties are included in accounts payable and accrued liabilities in the accompanying Condensed Consolidated Balance Sheets. Product warranty costs are estimated based upon the Company’s historical experience and the applicable warranty period. The Company periodically reviews the adequacy of its warranty reserve and adjusts, if necessary, the warranty percentage and accrual based on actual experience and estimated costs to be incurred. Changes to the Company’s product warranty liability for the six months ended June 30, 2014 are as follows (in thousands):

Balance at December 31, 2013	$	1,697
Additions charged to cost of product sales	339
Repairs and replacements	(395		)
Adjustments	(183		)
Balance at June 30, 2014	$	1,458

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INVENTORIES

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

At June 30, 2014 and December 31, 2013, inventories consisted of the following (in thousands):

	June 30, 2014		December 31, 2013
Raw materials	$	12,447	$	11,587
Work-in-process	17,878		22,139
Finished goods	29,719		30,305
Total	$	60,044	$	64,031
Short-term portion	$	54,043	$	58,059
Long-term portion	$	6,001	$	5,972

Amortization expense related to the fair value step-up during the six months ended June 30, 2014 and 2013 was $4.7 million and $9.1 million, respectively.

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STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based compensation expense

The Company recognized share-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Costs of product sales	$	660	$	262	$	1,197	$	429
Research and development	637		202		1,144		531
Selling, general and administrative	1,830		812		3,931		2,150
Total share-based compensation expense	$	3,127	$	1,276	$	6,272	$	3,110

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RESTRUCTURING

6 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

RESTRUCTURING

RESTRUCTURING

During the fourth quarter of 2012, the Company initiated a cost reduction action that included downsizing its workforce to realign the Company's organization to support its strategy to stabilize its core business and position the Company for growth. Restructuring charges of $4.5 million were recognized during the six months endedJune 30, 2013.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

AND CONTINGENCIES

Legal Proceedings

The Company has been in the past, and continues to be, a party to litigation, which has consumed, and may continue to consume, substantial financial and managerial resources. The Company could incur substantial costs and divert the attention of management and technical personnel in defending against litigation, and any adverse ruling or perception of an adverse ruling could have a material adverse impact on the Company’s stock price. In addition, any adverse ruling could have a material adverse impact on the Company’s cash flows and financial condition. The results of any litigation or any other legal proceedings are uncertain and as of the date of this report, the Company has not accrued any liability with respect to any of the litigation matters listed below:

Enzo Litigation

Southern District of New York Case: On October 28, 2003, Enzo Life Sciences, Inc., a wholly-owned subsidiary of Enzo Biochem, Inc. (collectively "Enzo"), filed a complaint against the Company that is pending in the United States District Court for the Southern District of New York for breach of contract, injunctive relief and declaratory judgment. The Enzo complaint relates to a 1998 distributorship agreement with Enzo under which the Company served as a non-exclusive distributor of certain reagent labeling kits supplied by Enzo. On November 10, 2003, the Company filed a complaint against Enzo in the United States District Court for the Southern District of New York for declaratory judgment, breach of contract and injunctive relief relating to the 1998 agreement. On April 22, 2014, the Company entered into a settlement agreement with Enzo with respect to these two lawsuits. Pursuant to the agreement the Company agreed to pay Enzo $5.1 million and recorded the litigation settlement charge within the results of operations for the six months ended June 30, 2014. The settlement agreement does not include the Delaware Case described below.

Delaware Case: On April 6, 2012, Enzo filed a complaint against the Company in the United States District Court for the District of Delaware. In the complaint, plaintiff alleges that Affymetrix is infringing U.S. Patent No. 7,064,197 by making and selling certain GeneChip® products. The plaintiff seeks a preliminary and permanent injunction enjoining the Company from further infringement and unspecified monetary damages. The Company will vigorously defend against the plaintiff’s case. No trial date is set for this action.

Administrative Proceedings

The Company’s intellectual property is subject to a number of significant administrative actions. These proceedings could result in the Company’s patent protection being significantly modified or reduced, and the incurrence of significant costs and the consumption of substantial managerial resources. For the six months ended June 30, 2014 and 2013, the Company did not incur significant costs in connection with administrative proceedings.

Leases

On June 20, 2014, the Company entered into two leases with BMR-10255 Science Center LP and BMR-10240 Science Center Drive LP, for two premises located in San Diego, California (the “Leases”). The Leases cover premises totaling approximately 82,759 rentable square feet. Subject to the completion of tenant improvements, both Leases are expected to commence in August 2015 and expire in March 2023. The Company expects to bring all employees of its eBioscience business unit in San Diego within closer proximity upon the commencement of the Leases.

Future minimum lease obligations, net of sublease income, as of June 30, 2014 under the two leases mentioned above are as follows (in thousands):

For the Year Ending December 31,	Amount
2014, remainder thereof	$	—
2015	780
2016	2,324
2017	2,393
2018	2,462
Thereafter	11,242
Total	$	19,201

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LONG-TERM DEBT OBLIGATIONS

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

LONG-TERM DEBT OBLIGATIONS

LONG-TERM DEBT OBLIGATIONS

The following table summarizes the carrying amount of the Company's borrowings (in thousands):

	June 30, 2014		December 31, 2013
Term loan	$	24,950	$	29,450
Revolving credit facility	—		10,000
4.00% Notes	105,000		105,000
Total debt	129,950		144,450
Less: current portion of long-term debt	4,000		12,750
Total long-term debt	$	125,950	$	131,700

Term Loan and Revolving Credit Facility

On June 25, 2012, in conjunction with the acquisition of eBioscience, Inc., the Company entered into a five year $100.0 million Senior Secured Credit Facility credit agreement (the “Credit Agreement”). The Credit Agreement provided for a Term Loan in an aggregate principal amount of $85.0 million and a revolving credit facility in an aggregate principal amount of $15.0 million.

On October 17, 2013 the Company refinanced its Senior Secured Credit Facility and entered into the Fourth Amendment to Credit Agreement (the "Fourth Amendment"). The Fourth Amendment provided, among other things, for term loan in the aggregate principal amount of $38.0 million and revolving loan commitments in the aggregate principal amount of $10.0 million, each with a term of five years. The Company borrowed a total of $38.0 million under the Term Loan and $10.0 million under the revolving loan upon refinancing. As of June 30, 2014, the applicable interest rate was approximately 4.38%.

On July 28, 2014, the Company entered into the Fifth Amendment to Credit Agreement (the "Fifth Amendment" and the Credit Agreement as so amended, the "Amended Credit Agreement"). The Fifth Amendment provides, among other things, for (1) an uncommitted incremental term loan facility in an aggregate amount not to exceed $50.0 million and (2) the reduction of interest rate margins.

At the option of the Company (subject to certain limitations), borrowings under the Amended Credit Agreement bear interest at either a base rate or at the London Interbank Offered Rate (“LIBOR”), plus, in each case, an applicable margin. Under the Base Rate Option, interest will be at the base rate plus 1.5% to 1.75% dependent on the senior leverage ratio then in effect calculated on the basis of the actual number of days elapsed in a in a year of 365 or 366 days (as applicable) and payable quarterly in arrears. The base rate will be equal to the greatest of (a) the rate last quoted by The Wall Street Journal (or another national publication described in the Amended Credit Agreement) as the U.S. “Prime Rate,” (b) the federal funds rate, plus 0.50% per annum or (c) LIBOR for an interest period of one month, plus 1.00% per annum. Under the LIBOR Option, interest will be determined based on interest periods to be selected by Affymetrix of one, two, three or six months (and, to the extent available to all relevant lenders, nine or 12 years) and will be equal to LIBOR plus 2.50% and 2.75% dependent on the senior leverage ratio then in effect, calculated based on the actual number of days elapsed in a 360-day year. Interest will be paid at the end of each interest period or in the case of interest periods longer than three months, quarterly.

The loans and other obligations under the Senior Secured Credit Facility are (i) guaranteed by substantially all of the Company’s domestic subsidiaries (subject to certain exceptions and limitations) and (ii) secured by substantially all of the assets of Affymetrix and each guarantor (subject to certain exceptions and limitations).

The Amended Credit Agreement requires the Company to maintain an interest coverage ratio of at least 3.5 to 1.0 and a senior leverage ratio not exceeding initially 1.75 to 1.00 and stepping down to 1.20 to 1.00. The Amended Credit Agreement also includes other covenants, including negative covenants that, subject to certain exceptions, limit Affymetrix’, and that of certain of its subsidiaries’, ability to, among other things: (i) incur additional debt, including guarantees by the Company or its subsidiaries, (ii) make investments, pay dividends on capital stock, redeem or repurchase capital stock, redeem or repurchase the Company’s senior convertible notes or any subordinated obligations, (iii) create liens and negative pledges, (iv) make capital expenditures, (v) dispose of assets, (vi) make acquisitions, (vii) create or permit restrictions on the ability of Affymetrix’ subsidiaries to pay dividends or make distributions to Affymetrix, (viii) engage in transactions with affiliates, (ix) engage in sale and leaseback transactions, (x) consolidate or merge with or into other companies or sell all or substantially all the Company’s assets and (xi) change their nature of business, their organizational documents or their accounting policies.

The Company is required to make the following mandatory prepayments: (a) annual prepayments in an amount equal to 50% of excess cash flow (as defined in the Amended Credit Agreement), subject to leverage-based step-downs, (b) prepayments in an amount equal to 100% of the net cash proceeds of issuances or incurrences of debt obligations of Affymetrix and its subsidiaries (other than debt incurrences expressly permitted by the Credit Agreement), (c) prepayments in an amount equal to 100% of the net proceeds of asset sales in excess of $2.5 million annually (subject to certain reinvestment rights) and (d) prepayments in an amount equal to any indemnification payments or similar payments received under the Acquisition Agreement, subject to certain exclusions.

The Amended Credit Agreement also contains events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-default and cross-acceleration to other indebtedness in excess of specified amounts, monetary judgment defaults in excess of specified amounts, bankruptcy or insolvency, actual or asserted invalidity or impairment of any part of the credit documentation (including the failure of any lien on a material portion of the collateral to remain perfected) and change of ownership or control defaults. In addition, the occurrence of a “fundamental change” under the indenture governing the 4.00% Notes would be an event of default under the Amended Credit Agreement. As of June 30, 2014, the Company was in compliance with the covenants.

The proceeds received on June 25, 2012 from the original Term Loan were net of debt issuance costs of approximately $4.5 million being amortized over the 5-year term of the Senior Secured Credit Facility. Following the refinancing under the Fourth Amendment, the Company wrote off unamortized debt issuance costs of $2.5 million associated with the original Term Loan, and received proceeds on October 17, 2013 from the new Term Loan and Revolver, net of debt issuance costs of approximately $0.8 million that amortize on the effective interest rate method beginning October 17, 2013.

As of June 30, 2014, the Company had an outstanding principal balance of approximately $25.0 million under the Term Loan and incurred $0.4 million and $1.0 million in interest expense under the Senior Secured Credit Facility for the three and six months ended June 30, 2014, respectively. There were no amounts outstanding under the Revolving Credit Facility as of June 30, 2014.

Quarterly, principal payments are due under the Term Loan, which amortizes such that 10% of the outstanding principal is due during the first four years and the remaining 60% is due in the fifth year, including any remaining principal balance and any outstanding revolver balance at such time. The principal amount of unpaid maturities per the Amended Credit Agreement is as follows (in thousands):

2014, remainder thereof	$	—
2015	—
2016	—
2017	2,150
2018	22,800
Total	$	24,950

The Company intends to continue making quarterly payments during 2014 and reclassified $4.0 million as current on the accompanying Condensed Consolidated Balance Sheet as of June 30, 2014.

4.00% Convertible Senior Notes

On June 25, 2012, the Company issued $105.0 million principal amount of 4.00% Convertible Senior Notes ("4.00% Notes") due July 1, 2019. The net proceeds, after debt issuance costs totaling $3.9 million from the 4.00% Notes offering, were $101.1 million. The 4.00% Notes bear interest of 4.00% per year payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2013 until the maturity date of July 1, 2019, unless converted, redeemed or repurchased earlier. The debt issuance costs are being amortized over the effective life of the 4.00% Notes, which is 7 years.

Holders of the 4.00% Notes may convert their 4.00% Notes into shares of the Company’s stock at their option any time prior to the close of business on the business day immediately preceding the maturity date. The 4.00% Notes are initially convertible into approximately 170.0319 shares of the Company’s common stock per $1,000 principal amount of notes, which equates to 17,857,143 shares of common stock, or an initial conversion price of $5.88 per share of common stock. The conversion rate is subject to certain customary anti-dilution adjustments. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event in certain circumstances. Holders may also require the Company to repurchase for cash their notes upon certain fundamental changes.

On or after July 1, 2017, the Company can redeem for cash all or part of the 4.00% Notes if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending within 5 trading days prior to the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 4.00% Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

As of June 30, 2014, the outstanding balance on the 4.00% Notes was $105.0 million and interest incurred for the three and six months ended June 30, 2014 was $1.2 million and $2.4 million, respectively.

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NET LOSS PER COMMON SHARE

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

NET LOSS PER COMMON SHARE

NET LOSS PER COMMON SHARE

Basic earnings per common share is calculated using the weighted‑average number of common shares outstanding during the period less the weighted‑average shares subject to repurchase. Diluted earnings per common share, if any, gives effect to dilutive common stock subject to repurchase, stock options (calculated based on the treasury stock method), shares purchased under the employee stock purchase plan and convertible debt (calculated using an as-if-converted method).

For the three and six months ended June 30, 2014 and 2013, diluted net loss per common share is identical to basic net loss per common share due to potentially dilutive securities being excluded from the calculation, as their effect is anti-dilutive. Potentially dilutive securities excluded from diluted net loss per common share on an actual outstanding basis, were as follows (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Employee stock options	4,540	5,646	4,540	5,646
Employee stock purchase plan	89	14	45	14
Restricted stock and restricted stock units	4,336	3,887	4,336	3,887
Convertible notes	17,857	17,857	17,857	17,868
Total	26,822	27,404	26,778	27,415

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INCOME TAXES

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

During the three and six months ended June 30, 2014, the Company recognized a provision for income taxes of $0.4 million and $0.7 million, respectively. The provision for income taxes during the three months ended June 30, 2014 primarily consists of foreign taxes, an income tax expense of $0.1 million resulting from a reduction in valuation allowance for net deferred tax assets arising from other comprehensive income recorded in accordance with intraperiod tax allocation guidance, and an income tax benefit of $0.3 million related to the lapses of statutes of limitations. The provision for income taxes during the six months ended June 30, 2014 primarily consists of foreign taxes, offset by an income tax benefit of $0.1 million resulting from a reduction in valuation allowance for net deferred tax assets arising from other comprehensive income recorded in accordance with intraperiod tax allocation guidance, and an income tax benefit of $0.3 million related to the lapses of statutes of limitations.

Due to the Company’s history of cumulative operating losses, management concluded that, after considering all the available objective evidence, it is not more likely than not that all the Company’s net deferred tax assets will be realized. Accordingly, all of the Company's U.S. deferred tax assets continue to be subject to a valuation allowance as of June 30, 2014.

As of June 30, 2014, the total amount of unrecognized tax benefits decreased by approximately $0.3 million as compared to December 31, 2013, due to the lapses of statutes of limitations. As a result of settlements of ongoing tax examinations and/or expiration of statues of limitations without the assessment of additional income taxes, the amount of unrecognized tax benefits that could be recognized in earnings in the next 12 months could range from zero to approximately $1.8 million.

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Derivative Financial Instruments (Details) (USD $)	6 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 3-month LIBOR	Jun. 30, 2014 Euro [Member]	Jun. 30, 2014 Japanese Yen [Member]	Jun. 30, 2014 Swap [Member]	Jun. 30, 2014 Net Investment Hedging [Member]	Dec. 31, 2013 Net Investment Hedging [Member]	Jun. 30, 2014 Net Investment Hedging [Member] Euro [Member]	Dec. 31, 2013 Net Investment Hedging [Member] Euro [Member]	Jun. 30, 2014 Net Investment Hedging [Member] Japanese Yen [Member]	Dec. 31, 2013 Net Investment Hedging [Member] Japanese Yen [Member]	Jun. 30, 2014 Net Investment Hedging [Member] British Pound [Member]	Dec. 31, 2013 Net Investment Hedging [Member] British Pound [Member]	Jun. 30, 2014 Net Investment Hedging [Member] Swap [Member]	Dec. 31, 2013 Net Investment Hedging [Member] Swap [Member]
Derivatives, Fair Value [Line Items]
Notional amount of derivative						$ 32,576,000	$ 42,538,000	$ 14,714,000	$ 21,990,000	$ 3,630,000	$ 4,588,000	$ 3,925,000	$ 5,653,000	$ 10,307,000	$ 10,307,000
Maximum existing foreign currency forward exchange contracts maturity period	12 months
Maximum expected period to recognized deferred amount into earnings	12 months
Expected deferred loss amount to be recognized in OCI	300,000
Loss on cash flow hedge ineffectiveness (less than $0.1 million)			100,000	100,000
Minimum Percentage of Aggregate Principal Amount of Term Loan Required to Maintain Derivative Contracts	35.00%
Minimum Term of Derivative Contracts under Credit Agreement	3 years
Interest Rate Swap, Quarterly Fixed Rate Payments		0.61%
Fair value of Interest Rate Swap (less than $0.1 million)					$ 100,000

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SEGMENT AND GEOGRAPHIC INFORMATION, Revenue and Loss From Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 segment	Jun. 30, 2013	Dec. 31, 2013 business_unit
Segment Reporting Information [Line Items]
Number of reportable segments			2
Number of business units					4
Loss from operations:	$ (304)	$ (2,951)	$ (9,045)	$ (15,157)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue:	85,432	79,464	168,403	157,409
Loss from operations:	(304)	(2,951)	(9,045)	(15,157)
Operating Segments [Member] | Affymetrix Core [Member]
Segment Reporting Information [Line Items]
Revenue:	62,085	57,237	121,532	113,157
Loss from operations:	854	265	(6,734)	(7,789)
Operating Segments [Member] | eBioscience [Member]
Segment Reporting Information [Line Items]
Revenue:	23,347	22,227	46,871	44,252
Loss from operations:	$ (1,158)	$ (3,216)	$ (2,311)	$ (7,368)

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Financial assets and liabilities measured at fair value on a recurring basis

As of June 30, 2014 and December 31, 2013, the assets and liabilities measured at fair value consisted of the following (in thousands):

	June 30, 2014						December 31, 2013
	Fair Value Measurements Using Input Types						Fair Value Measurements Using Input Types
	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Derivative assets	$	7	$	—	$	7	$	185	$	—	$	185
Non-marketable securities	—		4,139		4,139		—		4,383		4,383
Total assets	$	7	$	4,139	$	4,146	$	185	$	4,383	$	4,568
Liabilities:
Derivatives liabilities	$	318	$	—	$	318	$	938	$	—	$	938

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table summarizes the change in the fair value of the Company's non-marketable securities during the six months ended June 30, 2014 (in thousands).

Balance as of December 31, 2013	$	4,383
Sales	(2,162		)
Realized gain (loss)	1,240
Unrealized gain (loss)	678
Balance as of June 30, 2014	$	4,139

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LONG-TERM DEBT OBLIGATIONS (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes the carrying amount of the Company's borrowings (in thousands):

	June 30, 2014		December 31, 2013
Term loan	$	24,950	$	29,450
Revolving credit facility	—		10,000
4.00% Notes	105,000		105,000
Total debt	129,950		144,450
Less: current portion of long-term debt	4,000		12,750
Total long-term debt	$	125,950	$	131,700

Schedule of Maturities of Long-term Debt

The principal amount of unpaid maturities per the Amended Credit Agreement is as follows (in thousands):

2014, remainder thereof	$	—
2015	—
2016	—
2017	2,150
2018	22,800
Total	$	24,950

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Loss Contingencies [Line Items]
2014, remainder thereof	$ 0
2015	780,000
2016	2,324,000
2017	2,393,000
2018	2,462,000
Thereafter	11,242,000
Total	19,201,000
Settled Litigation [Member] | Southern District of New York [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount	$ 5,100,000

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INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Inventories [Abstract]
Raw materials	$ 12,447	$ 11,587
Work-in-process	17,878	22,139
Finished goods	29,719	30,305
Total	60,044	64,031
Short-term portion	54,043	58,059
Long-term portion	$ 6,001	$ 5,972

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Unrealized change in available-for-sale and non-marketable securities, Tax	$ (545)	$ 256

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STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE

STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION EXPENSE

Share-based Compensation Plans

The Company has a share-based compensation program, most recently the 2000 Amended and Restated Equity Incentive Plan (the “Plan”), that provides the Board of Directors broad discretion in creating equity incentives for employees, officers, directors and consultants. This program includes incentive and non-qualified stock options and non-vested stock awards (also known as restricted stock) granted under various stock plans. As of June 30, 2014, the Company had approximately 4.4 million shares of common stock reserved for future issuance under its share-based compensation plans. New shares are issued as a result of stock option exercises, restricted stock units vesting and restricted stock award grants.

The Company recognized share-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Costs of product sales	$	660	$	262	$	1,197	$	429
Research and development	637		202		1,144		531
Selling, general and administrative	1,830		812		3,931		2,150
Total share-based compensation expense	$	3,127	$	1,276	$	6,272	$	3,110

As of June 30, 2014, $17.8 million of total unrecognized share-based compensation expense related to non-vested awards is expected to be recognized over the respective vesting terms of each award through 2018. The weighted‑average terms of the unrecognized share-based compensation expense are 2.3 years for stock options and 2.1 years for restricted stock.

Performance-Based Awards

The Company's share-based awards program includes performance-based restricted stock awards ("PRSUs") that vest based upon the achievement of certain performance criteria and a service vesting criteria following the achievement of performance criteria. Performance criteria include various operational criteria of the Company such as revenues, earnings before interest, taxes, depreciation and amortization, product launches, and similar criteria, either on a Company-wide or segment specific basis. The service vesting criteria ranges from six months to four years. The Company recognizes the fair value of these awards to the extent the achievement of the related performance criteria is estimated to be probable. If a performance criteria is subsequently determined to not be probable of achievement, any related expense is reversed in the period such determination is made. Conversely, if a performance criteria is not currently expected to be achieved but is later determined to be probable of achievement, a “catch-up” entry is recorded in the period such determination is made for the expense that would have been recognized had the performance criteria been probable of achievement since the grant of the award.

As of June 30, 2014, there were 1,194,100 PRSUs outstanding with an average grant date fair value of $5.93 per PRSU. The Company expects that it is probable that 874,686 of these PRSUs will vest and that the related unrecognized stock compensation expense of $2.9 million will be recognized over the next 4 years. Changes in the Company’s assessment of the probability of achievement of performance criteria could have a material effect on the results of operations in future periods. There were no changes in estimate related to the probability of vesting or recognition of expense related to PRSUs during either of the periods ended June 30, 2014 or 2013.

For additional information concerning the Company's share-based compensation plans, including performance-based awards programs, see Note 13, "Stockholders' Equity and Share-Based Compensation Expense", to the consolidated financial statements in Part II, Item 8 of the Company's 2013 Annual Report on Form 10-K.

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NET LOSS PER COMMON SHARE (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Securities excluded from diluted earnings per common share on an actual outstanding basis

Potentially dilutive securities excluded from diluted net loss per common share on an actual outstanding basis, were as follows (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Employee stock options	4,540	5,646	4,540	5,646
Employee stock purchase plan	89	14	45	14
Restricted stock and restricted stock units	4,336	3,887	4,336	3,887
Convertible notes	17,857	17,857	17,857	17,868
Total	26,822	27,404	26,778	27,415

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STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE Share-based Compensation Plans Narrative (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Common stock reserved for future issuance (in shares)	4.4
Unrecognized share-based compensation expense	$ 17.8
Weighted-average term of unrecognized share-based compensation expense, Stock Options	2 years 3 months 18 days
Weighted-average term of unrecognized share-based compensation expense, Restricted Stock	2 years 0 months 29 days

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Components of accumulated other comprehensive income, net of tax

The following table summarizes the amounts reclassified out of accumulated other comprehensive income, net of tax, for the six months ended June 30, 2014 (in thousands):

	December 31, 2013			(Decrease)/ Increase					Reclassification Adjustments			June 30, 2014
Foreign currency translation adjustment	$	7,784		$	(458	)			$	—		$	7,326
Unrealized change in non-marketable securities	1,373			421			(1	)	—			1,794
Unrealized change in cash flow hedges	(765		)	1,253					(775		)	(287		)
Total accumulated other comprehensive income, net of tax	$	8,392		$	1,216				$	(775	)	$	8,833

(1) Amounts of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, were not material except for the increase in unrealized gain in non-marketable securities that is net of a $0.5 million income tax expense.