Semiconductor History | Audubon, Pennsylvania — Two Jars of Chips and the End of the $200 Processor

At WESCON in San Francisco on 16 September 1975, the trade show's rules forbade selling anything on the floor. So Chuck Peddle took a hotel room nearby, put two glass jars of microprocessors on a table, and sold them there at twenty-five dollars each while the beer was free. Intel's 8080 and Motorola's 6800 were going for close to two hundred dollars at the time. The 6502 in those jars did the same job for an eighth of the price. The jars were mostly full of dead chips. Yields were poor and only about a hundred working parts existed, so the good ones sat in the top layer and the rest were there to make the supply look deep. Peddle confirmed this himself in 2016, four decades later. The price was not a stunt. Peddle had wanted to build a cheap processor at Motorola and been told to stop; he left in 1974 with seven colleagues for MOS Technology, and the team rebuilt the idea around a minimal instruction set. Bill Mensch, who designed the chip with him, credited the low price to a fabrication process that yielded roughly ten times as many good die as the competition. Motorola sued, and MOS settled in March 1976 by withdrawing the pin-compatible 6501, paying $200,000, and cross-licensing patents. The 6502 survived, and Motorola cut the 6800 from $175 to $69 within weeks of WESCON. 3,510 transistors, about one megahertz, and a sixteen-bit address bus. That chip ran the Apple II, the Commodore PET and 64, the Atari 2600, the BBC Micro and the Nintendo Entertainment System, which is to say it ran most people's first encounter with a computer. One correction worth making: the histories all say Norristown. MOS Technology's plant was at 950 Rittenhouse Road, and that address is in Audubon, in Lower Providence Township, Pennsylvania 19403 — near Norristown but not in it. The company used a Norristown mailing address and the error has been copied ever since. There is no monument. It is an ordinary industrial road in suburban Pennsylvania, and the chip is easier to find than the building: the die shot here is a 6502 revision A. Photo: Pauli Rautakorpi, CC BY 3.0, via Wikimedia Commons (die shot of a MOS Technology 6502, revision A — the chip itself, not the plant).