If a chip design with five flaws results in a mask with ten flaws, there is no point in making another because it will have the same five design flaws plus some other set of five copying flaws. So companies simply built chips with these masks, and threw away broken chips. At the time in the 1970s, this meant throwing away 70% or more of the completed chips. The price of a chip is largely defined by the yield, the measure of how many work, so improving this number can lower the price and raise the gross profit dramatically.
MOS's engineers had learned the trick of fixing their masks after they were made. This allowed them to correct the major flaws in a series of small fixes, eventually producing a mask with a very low flaw rate. The company's production lines typically reversed the numbers others were achieving; even the early runs of a new CPU design--what would become the 6502--were achieving a success rate of 70% or better. This meant that not only were its designs faster, they cost much less as well.
The 6502 family makes its mark
When the 6501 was announced, Motorola launched a lawsuit almost immediately. Although the 6501 was not compatible with the 6800, it could nevertheless be plugged into existing motherboard designs because it used the same arrangement of pins. That was enough, apparently, to allow Motorola to sue. Sales of the 6501 basically stopped, and the lawsuit would drag on for many years before MOS was eventually forced to pay a paltry $200,000 in fines.
In the meantime the 6502 had gone on sale at 1MHz in September 1975 for a mere $25. Due to its speed it outran the more complex and expensive 6800, Intel 8080 and Zilog Z80 series, but cost much less and was easier to work with. Although it did not have the advantage of being able to be used in existing Motorola hardware like the 6501, it was so inexpensive that it quickly overran the 6800 in popularity anyway, making that a moot point.
In fact the CPU was so cheap that many people believed it to be scam when the company first showed the 6502 at a 1975 trade show. They were not aware of MOS's masking techniques and when they calculated the price per chip at normal yield rates it did not add up. But any hesitation to buy it evaporated when both Motorola and Intel dropped the prices on their own designs from $179 to $69 at the same show in order to compete. Their moves legitimized the 6502 and by the end of the show all the samples were gone.
The 6502 would quickly go on to be one of the most popular chips of its day. A number of companies licensed the 650x line from MOS, including Rockwell International, GTE, Synertek, and Western Design Center (WDC).
A number of different versions of the basic CPU, known as the 6503 through 6507, were offered in 28-pin packages for lower cost. The various models removed signal or address pins. Far and away the most popular of these was the 6507, which was used in the Atari 2600 and in Atari disk drives. The 6504 was sometimes used in printers. MOS also released a series of similar CPUs using external clocks, which added a "1" to the name in the 3rd digit, as the 6512 through 6515. These were useful in systems where the clock support was already being provided on the motherboard by some other chip. The final addition was the "crossover" 6510, used in the Commodore 64, with additional I/O ports.
Commodore Semiconductor Group
However successful the 6502 was, the company itself was having problems. At about the time the CPU was released the entire calculator market collapsed, and MOS's only existing products stopped shipping. Soon they were in serious financial trouble. Rescue came in the form of Commodore, who bought the entire company in a stock trade, on the condition that Chuck Peddle would join Commodore as chief engineer. The deal went through, and while the firm basically became Commodore's production arm, they continued using the name MOS for some time so that manuals would not have to be reprinted. After a while MOS became the Commodore Semiconductor Group (CSG). Despite being renamed to CSG, all chips produced were still stamped with the old "MOS" logo until 1989.
MOS had previously designed a simple computer kit called the KIM-1, primarily to "show off" the 6502 chip. At Commodore Peddle convinced the owner, Jack Tramiel, that calculators were a dead end, and that home computers would soon be huge. A repackaged KIM with a new display driver and keyboard became the Commodore PET computer.
However, the original design group appeared to be even less interested in working for Jack Tramiel than it had for Motorola, and the team quickly started breaking up. One result was that the newly-completed 6522 (VIA) chip was left undocumented for years.
Bill Mensch left MOS even before the Commodore takeover, and moved home to Mesa, AZ from MOS's Norristown, PA. After a short stint consulting for a local company called ICE, he set up the Western Design Center (WDC) in 1978. As a licensee of the 6502 line, their first products were bug-fixed, power-efficient CMOS versions of the 6502 (the 65C02, both as a separate chip and embedded inside a microcontroller called the 65C150). But then they expanded the line greatly with the introduction of the 65816, a fairly straightforward 16-bit upgrade of the original 65C02 that could also run in 8-bit mode for compatibility. The design of the similar-in-concept 32-bit 65832 CPU was completed, but not put into production. Since then WDC have moved much of the original MOS catalog to CMOS, and the 6502 continues to be a popular CPU in embedded systems, like medical equipment and car dashboard controllers.
GMT Microelectronics; Game over
After Commodore's bankruptcy in 1994, Commodore Semiconductor Group, MOS's successor, was bought by its former management for about $4.3 million, plus an additional $1 million to cover miscellaneous expenses including EPA liens. Dennis Peasenell became CEO. In 1995, the company, operating under the name GMT Microelectronics (Great Mixed-signal Technologies), reopened MOS Technologies' original, circa-1970 one-micron fab in Norristown, Pennsylvania that Commodore had closed in 1992. The plant had been on the EPA's National Priorities List of hazardous waste sites since 1989. By 1999 it had $21 million in revenues and 183 employees. However, in 2001 the EPA shut the plant down. GMT ceased operations and was liquidated.
This article is derived from http://en.wikipedia.org/wiki/MOS_Technologies