Spectacular Rise and Fall of Commodore
143 Goldthorpe Crescent
Copyright © 2005 by Brian Bagnall. All rights
reserved, including the right of reproduction in
whole or in part in any form.
Photographs courtesy of R.J. Mical, Dave Haynie,
Chuck Peddle, and Bil Herd. Designed by Mike Newton.
Manufactured in Canada.
Library and Archives Canada Cataloguing in Publication.
Bagnall, Brian, 1972-
Stumbling giant: the spectacular rise and fall of
Includes bibliographical references.
Thanks to everyone who helped make this book better:
Cameron Davis, Denny Atkins, Gareth Knight, Henry
Makow, Ian Matthews, Jim Brain, Jim Butterfield,
Martin Goldberg, Robert Bernardo, and Winnie Forster.
|Prolog: The Rise of Commodore
|1. MOS Technology, 1974 to 1976
|2. The Acquisition, 1975 to 1976
|3. The PET, 1976 to 1977
|4. Releasing the PET, 1977 to 1978
|5. The Trinity, 1977 to 1979
|6. Business is War, 1979 to 1980
|7. The Color Computers, 1979 to 1980
|8. The VIC-20, 1980
|9. Computers for the Masses, 1981
|10. The Race to a Million, 1981 to 1983
|11. The Secret Project, 1981
|12. The Commodore 64, 1982
|13. Selling the Revolution, 1982
|14. Commodore Mania, 1983
|15. TED, 1983
|16. Dismissing the Founder, 1984
|17. The Sequel, 1984
|18. Brawling for the C128, 1984 to 1985
|19. The Savior of Commodore, 1982 to 1985
|20. The Amiga, 1985 to 1986
|21. Dropping the Ball, 1985 to 1987
|22. The New Amigas, 1986 to 1987
|23. A Radical New Direction, 1988 to 1992
|24. The Fall of Commodore, 1992 to 1994
"Do you remember? I do." - Bouncing
Commodore Business Machines ended operations on
April 29, 1994. A decade has now passed. What has
Commodore meant to the world?
Amid the chaos, infighting, and excitement, Commodore
was able to achieve some remarkable industry firsts.
They were the first major company to show a personal
computer, before even Apple and Radio Shack. They
sold a million computers before anyone else. The
first true multimedia computer came from Commodore.
Yet with all these firsts, Commodore receives almost
no credit as a pioneer.
The history of early computers has tended to focus
on Microsoft, IBM, and Apple, snubbing contributions
made by Commodore. "There is a lot of revisionism
going on and I don't think it's fair," says
Commodore 64 designer Robert Yannes. "People
wanted to ignore Commodore."
An early-popularized story of the microcomputer
revolution was Accidental Empires, by Robert X.
Cringely (born Mark Stephens). The former Apple
employee perpetuated a select view of the microcomputer
revolution, a view that not everyone accepts as
accurate. In Infinite Loop, Michael Malone writes,
"The pseudonymous Cringely is notorious for
his sloppy way with facts." In his book, Cringely
said, "Commodore wasn't changing the world;
it was just trying to escape from the falling profit
margins of the calculator market while running a
stock scam along the way." In reality, Commodore
employees worked tirelessly to deliver state of
the art technology to their customers at a price
far lower than Apple's. PBS adapted Cringley's book
as a popular TV series, Triumph of the Nerds (1996).
The adaptation ignored Commodore completely. Turner
Network Television produced a movie called Pirates
of Silicon Valley (1999), based on a more credible
book, Fire in the Valley, by Paul Freiberger &
Michael Swaine. Regrettably, the producers ignored
much of the book and focused on Steve Jobs, Bill
Gates, and IBM.
"The PC came out,
we changed players, and the whole early history
just got lost," says PET designer Chuck Peddle.
Peddle deplores the emphasis on IBM, Apple, and
Microsoft at the expense of earlier developers.
"None of that is true. It's not fair that the
stuff that happened earlier has been so badly ignored."
"I'm not sure it's intentional, it's just the
West Coast mindset that everything happens on the
West Coast, so we don't even need to pay attention
to what happened everywhere else," says Yannes.
"Most of the revisionist stuff I read was coming
out of California and Commodore was mostly successful
after it left California."
When writers are not ignoring Commodore, they often
get their facts wrong. In The Silicon Boys and their
Valley of Dreams, David Kaplan describes the Apple
IPO in 1980 and then adds, "But Apple soon
bred competition. Radio Shack and Commodore and
even Atari, among others, started selling their
own personal computers." In truth, Commodore
and Radio Shack began selling personal computers
in 1977, and Atari followed in 1979. This rosy picture
of Apple starting the microcomputer industry could
not be further from the truth. Apple had a very
slow start and eventually climbed to first place
sometime in the early 1980's, only to lose their
lead to Commodore once again. In the very earliest
days, Commodore was pioneering the consumer microcomputer
While IBM pushed business computers and Apple pushed
style, Commodore put computers into the hands of
ordinary consumers. Throughout the eighties, Commodore
consistently had the best prices, often with the
best technology. The Commodore 64 is the Model T
of computers, selling more units than any other
single computer model, according to the Guinness
Book of World Records.
In the summer of 2004, I began interviewing Commodore
insiders. We traveled back to the seventies, eighties,
and nineties and relived the Commodore experience.
I am thankful to each of the participants for taking
me on that journey, something I will never forget.
The journey has ended for me, but for you it is
about to begin. I hope you enjoy reading this book
as much as I enjoyed writing it.
May 22, 2005
The Rise of Commodore
Hailing a taxi in New York City in the early 1950's
might have put you in the company of future business
titan Jack Tramiel. As you sat in the back seat,
two large, bulging eyes would appraise you through
the rear view mirror, determining if you were worth
anything to him. At the time, Tramiel was positioning
himself for riches and glory. It was a humble beginning,
but driving a taxi was a blissful step up from the
work camps of Poland during World War II. In July
1947, a 19-year-old Idek Tramielski proposed to
and married a fellow concentration camp survivor
named Helen Goldgrub in Germany. While there, the
Hebrew Immigrant Aid Society (HIAS) contacted Idek
and helped him emigrate from Europe by paying for
his passenger liner ticket to New York City. Idek
changed his name to Jack Tramiel. In 1948, Tramiel
enlisted in the U.S. Army and served as a cook at
Fort Dix. Later, he joined the First Army Office
Equipment Repair Department, which was responsible
for maintaining and repairing almost 25 thousand
pieces of office equipment. Jack served two tours
of duty in Korea in 1950 and in 1952.
After his service ended, Jack worked for a typewriter
repair company called Ace Typewriter. There, he
met Manfred Kapp, and the two started
their own repair company called Singer Typewriter.
In 1958, Jack, Manfred, and their families moved
to Toronto, Canada and formed a typewriter manufacturing
company called Commodore. The company quickly grew
until a scandal rocked the Canadian financial scene,
with Commodore at the center. After an embarrassing
public inquiry, Commodore was finished; or so it
In 1966, a Canadian Investor named Irving Gould
purchased Commodore and redirected Jack Tramiel
into the burgeoning calculator business. By 1973,
savage competition from Texas Instruments and Japanese
calculator manufacturers began hurting Commodore's
profits. Jack began to look elsewhere for cheaper
1: MOS Technology, 1974-1976
Hi-tech companies need three players in order to
succeed: a financier, a technology-God, and a juggernaut
with a type-A personality. Commodore would require
these three ingredients to take them to a new level.
They had Irving Gould, with his financial expertise
and deep pockets. They had Jack, so aggressive people
sometimes referred to him as the scariest man alive.
All Commodore needed was a visionary engineer to
take Commodore into a new field of technology.
The Grey Wizard
of the East
In the 1970's, the image of a computer genius was
not in the mold of the young hacker we are familiar
with today. Teenaged tycoons like Bill Gates had
not filtered into the public consciousness, and
WarGames (1983, MGM) was not yet released, with
the prototypical computer hacker portrayed by Matthew
Broderick. The accepted image of a technological
genius was a middle-aged man with graying hair and
glasses, preferably wearing a long white lab coat.
Chuck Peddle was the image of a technology wizard,
with his wire-frame glasses, white receding hairline,
and slightly crooked teeth. At two hundred and fifty
pounds, the five foot eleven inch engineer always
struggled with his weight. Peddle describes himself
at that time as "totally out of shape,"
but he was characteristically optimistic and never
without a joke or story to tell.
Peddle possessed the ability to see further into
the future than most of his contemporaries and he
obsessively searched for the next big innovation.
His mind was always active, sometimes to the point
of causing sleep deprivation. "I don't sleep
much," says Peddle. "Never did."
In fact, the pattern of sleeplessness went back
to his earliest days.
Peddle's father was one of 21 kids. His family originated
in the Canadian Maritimes but the poor region made
it difficult to support a family. "The whole
area is very depressed," says Peddle. The family
moved to the United States in search of a better
economy. Charles Peddle was born in Bangor Maine
in 1937, one of eight children. "My mother
said that when I was young I used to lie awake in
my crib. I would cry and fuss and didn't sleep as
much as the other kids," he says. Peddle was
raised in the state capital of Augusta, Maine, with
a population of just over 20,000. Unfortunately,
the move from the Maritimes to Maine only marginally
improved the family prospects. "There is a
tremendous amount of leakage across the border [from
the Maritimes]," he says. "People are
willing to work for nothing because they are starving
to death at home. So it keeps wages down [in Maine]
and it's always been a poor state."
In his senior year of high school, Chuck thought
he found his calling. "In high school I worked
in a radio station," he says. "I really
wanted to be a radio announcer. For you, now, that
really doesn't mean very much, but back then that
was pre-TV and radio announcers were big."
Nearing the end of high school, Chuck traveled to
Boston to try out for a scholarship in broadcasting.
For the first time in his life, he saw his competition
and realized he did not have enough natural talent.
With a sense of relief, he recalls, "I failed
as a radio announcer." Returning to Augusta,
Chuck talked things over with the radio station
owner, who told him, "I'll employ you as a
radio announcer, but you will always be stuck in
Maine because you are not good enough."
Peddle spent some time in the military as he contemplated
his future. "I went into the Marine Corps just
before I got out of high-school in 1955 and I went
in active reserves in 1960," he recalls. During
this time, Peddle's former science teacher recognized
a gift in Peddle and encouraged him to enter engineering.
Peddle listened to his advice, but was unsure he
wanted to enter the sciences. "I didn't want
a pick and shovel job," he says. "I wasn't
sure what I was going to do and I was dirt poor.
Luckily, in Maine you can be dirt poor and still
get by." Unable to earn enough to pay for tuition
fees, he applied for student loans.
At the end of summer, Peddle entered the University
of Maine and enrolled in engineering and business
courses. "When I started, I didn't have a clue
what I wanted to do. I just knew I didn't want to
do pick and shovel jobs anymore," he says.
Partway through the first year, the university required
students to choose a discipline. "I really
loved physics, so I took engineering physics with
an electrical minor." Peddle remembers the
dismal state of computing. "There wasn't a
computer on campus, nor was there anyone on the
campus who was computer literate," he says.
In his final year, things began to change. "On
the entire campus, there was one analogue computer,
which had been bought in the last four months,"
he recalls. "The analogue computer was so primitive
and they didn't know how to use it. There was zero
knowledge about computers on that campus."
Peddle received a standard education in engineering,
devoid of computers. Over 200 miles away, at the
Massachusetts Institute of Technology (MIT), a revolution
was occurring which would soon change his situation.
Chuck Peddle's main influence was the legendary
inventor and mathematician, Claude Elwood Shannon.
Though virtually unknown to the world, Shannon was
the founding father of the modern electronic communications
age. Shannon was an eccentric, who terrified people
by riding his unicycle through the hallways at night
while juggling. Shannon also built a reputation
for inventions that were of little practical value
to anyone. Over the years, he filled his beachside
house with juggling robots, maze-solving robot mice,
chess playing programs, mind-reading machines, and
an electric chair to transport his children down
to the lake.
In 1948, while working at Bell Labs, Shannon produced
a groundbreaking paper, A Mathematical Theory of
Communication. In it, Shannon rigorously analyzed
the concept of Information Theory and how we transmit
pictures, words, sounds, and other media using a
stream of 1's and 0's. Chuck Peddle was enchanted
with Shannon's theories. "Today, you take this
for granted, but you have to remember that someone
had to dream all this up," he says. "Shannon
was one of those guys that dreamed up from nothing
the idea of the way information goes back and forth.
Everyone else's work stands on his shoulders and
most people don't even know it." In 1958, Shannon
returned to MIT at Lincoln Labs as a lecturer and
Artificial Intelligence researcher. While there,
he spread his concepts on Information Theory. "He
changed the world," says Peddle. "Shannon
was not only a pioneer but a prophet. He effectively
developed a following, almost like a cult."
One of Shannon's cultists would soon spread the
word to the University of Maine.
During Peddle's senior year, the University of Maine
accepted a lecturer from MIT who studied under Claude
Shannon. According to Peddle, "He had a nervous
breakdown, so he left MIT. The University of Maine
was so happy to get him because he was so superior
to the type of instructor they could normally get.
They gave him the opportunity to teach only four
classes per week between the hours of eleven o'clock
and noon. The guy was being totally babied and should
have been since he was a great instructor. He decided
to put together a class to teach people about Information
Theory." At the time, Peddle was enrolling
for his final year and the Information Theory class
happened to fit into his schedule. As Peddle recalls,
"It changed my life." The class began
with the instructor discussing the eyes and ears
as the primary sensors for receiving information.
"He started teaching us about Boolean algebra
and binary logic, and the concept of Information
Theory," recalls Peddle. "I just fell
in love. This was where I was going to spend my
"The whole thing about
how information moves back and forth is essential
to almost everything I've done," he says. However,
the topic that interested Peddle the most was computers.
"You have to understand how exciting it was,"
explains Peddle. "Information Theory was interesting,
and I've used it from time to time, but the computer
stuff this guy taught me was life changing."
Though this new revelation came late, Peddle immersed
himself in computer theory for his final year. "I
got an A on my senior paper in physics class by
giving a discussion on binary and Boolean arithmetic.
I was trying to build an and-gate in my senior class
[from early transistors] and the top electrical
engineers on campus couldn't help me figure out
the structures and why my and-gate didn't work,"
he recalls. Peddle and a friend even tried growing
a transistor crystal but soon gave up.
As graduation approached, Peddle began searching
for a place of permanent employment. He had married
while in College and already had a family. "I
came out of college and I had three kids; two and
a half, actually. I had the third one right after
[graduation]." The new responsibilities motivated
Peddle to find a better life. Peddle knew he wanted
to live in California and he wanted to work in computers.
"I only interviewed computer companies,"
he recalls. "At all of the companies of any
size, like GE and RCA, you went to work on a training
program for a year or two. You really were just
interviewing to join their training program."
Of all the companies, GE made the best impression
on Peddle. "I kind of fell in love with GE,"
he says. "When I got my offer, I thought I
would take it, because they had such a good training
Peddle and his young family moved to California
to start a new life with General Electric. Before
long, Peddle was working at GE's computing facility
in Phoenix, Arizona. Peddle worked with massive
mainframe computers, similar to those seen in the
1965 film Alphaville. The first computer Peddle
used was a GE-225, which he describes as a "very
old, very slow machine with small capacity."
Peddle entered programs into the GE-225 computer
by feeding a stack of punch cards into a card reader.
Peddle recalls, "I would set up long six or
seven hour runs, drive across the city and go to
bed with the instructions, 'If this breaks, call
me.' People would wake me up in the middle of the
night, I would find a solution in ten minutes and
go back to sleep."
In 1961, Peddle and two of his coworkers developed
the concept for variable sector disk formatting.
They even filed a patent for their idea. Years later,
Peddle would use this idea to give Commodore disk
drives more data storage than the competition.
In 1963, John G. Kemeny developed the Basic computer
language at Dartmouth College in New Hampshire,
along with Tom Kurtz. They developed Basic for the
GE-235 mainframe computer, and as a result, Peddle
was almost immediately aware of it. "I taught
Basic the day after it was invented," claims
Peddle. "I got one of the original Basic manuals
from a guy in Dartmouth and taught my people in
A year later, Kemeny and Kurtz created the revolutionary
Dartmouth Time-Sharing System (DTSS) for the GE-235.
With the time-sharing system, multiple users could
interact with the mainframe computer simultaneously
using terminals. General Electric immediately recognized
the value of this new system and used it to form
the basis of a new multi-million dollar business.
"Two years later, GE goes into the time-sharing
business," recalls Peddle. "They're selling
time-sharing to everybody and GE was selling more
computers than they could build. It was a big goddamned
With the time-sharing business suddenly ballooning,
General Electric sent Peddle to their largest computing
center in Evendale, Ohio to set up time-sharing
systems for General Electric's jet engine business.
The massive computer facility contained ten IBM-7094
mainframe systems, five GE-600's, and 25 GE-225's.
Peddle recalls, "We were running time-sharing
for about 4000 engineers and programmers."
The refrigerated computing facility seemed futuristic
in the mid-sixties, with white tiled walls, raised
floors, and rows and rows of mainframe computers.
Setting up the time-sharing systems was time consuming,
and Peddle often stayed at the computer facility
around the clock. During this time, Peddle picked
up a habit originated by GE founder Thomas Edison.
"I stole the idea of cots from him," he
says. "Everyone understood that if I'm tired,
I go to my office and take a half hour nap."
After Peddle set up the time-sharing systems, he
became administrator for two of the systems. The
experience gave Peddle valuable knowledge that he
would later use to develop his own computers. "I
got a really good understanding of what worked on
time-sharing and what didn't work, and what people
wanted," he says.
While working with GE, Chuck met John Pavinen and
Mort Jaffe, computer pioneers who would later become
involved with him at Commodore. "John Pavinen
was my manager at GE. He's the guy who put GE in
the computer business," says Peddle. "A
lot of the pioneers in the computer industry came
out of GE."
Peddle also remembers some darker moments in the
computer scene. "People used to be able to
get their hands on computers," he recalls.
"Then, in the late 60's and early 70's, there
was a big revolt against technology. People were
attacking computer centers with axes, claiming computers
were taking over our lives. We're talking about
serious hippy-type stuff. So all of the computer
rooms locked the doors." The need for security
drastically reduced the freedom people previously
enjoyed. "If you wanted to get a computer run,
you walked up with your punch cards and left them
on someone's desk," says Peddle. "They
went from these time-sharing friendly, I-can-do-everything
systems to having zero access to the computer."
Peddle detected a strong demand from users to own
their own computers.
The time-sharing business Peddle helped develop
at GE was phenomenally successful, but in the late
sixties, it started failing due to increased competition.
By this time, Peddle had risen to a high-level management
position. GE sent him to Phoenix to start another
time-sharing company. Suddenly, "Time-sharing
crashed; out of business; goodbye," says Peddle.
"Companies started figuring out how much money
they were spending on these time-sharing services
and it was millions. GE was just cleaning up, but
it just wasn't cost effective the way it was being
done, so companies kept cutting it off and they
moved the computers internally."
GE gave Peddle an assignment to work on cash registers,
which made Peddle start to think about the concept
of distributed intelligence. At the time, shared
computing kept the brains of the computer at one
central location and people could only interact
with the computer system using dumb-terminals (a
keyboard and monitor). Peddle envisioned distributed
intelligence, where he would transform the dumb-terminal
into an intelligent-terminal that could have a printer
connected to it, or other peripherals and data entry
devices. "I sat down and derived the principles
of distributed intelligence during a four-month
period," says Peddle. "There was a focus
on five or six stations around a minicomputer in
a centralized architecture. My concept was you moved
the intelligence to the place where you used it."
It was a step towards networked computers. "Then
I started trying to teach GE about it," says
Peddle. Unfortunately, in 1970 GE decided they were
no longer interested in computers. "I was getting
nowhere with GE because they were getting ready
to sell the computer business. Two months later,
they sold the company to Honeywell."
Peddle had the option to receive a severance package
or move elsewhere in GE. For Peddle, the decision
was easy. "Myself and two other guys took the
termination agreement. We said, 'This is found money,
so we're going to start our own business.' We had
already started on the cash register business, and
I had a deal with Exxon." The three partners
immersed themselves in their intelligent-terminals.
"We got it all done and actually built the
electronics that demonstrated the concepts,"
says Peddle. During this time, Peddle devised many
concepts that would have made him wealthy if he
chose to patent them. "We invented the credit-card
driven gasoline pump, the first credit verification
terminal [i.e. credit card scanners] and the first
point of sale terminal [i.e. computerized cash registers]."
Peddle now laments, "It's too bad we didn't
patent the shit out of it because we could have
been very wealthy as a result of that."
Peddle realized the intelligent terminal needed
a fundamentally new component to make their ideas
work. "We needed our own microprocessor,"
he says. This realization would lead Peddle on an
extraordinary journey that would change millions
of lives. At first, Peddle tried to develop the
technology within his fledgling company but it was
hopeless without funding. "We had everything
going for us, but we didn't know how to raise money,"
he says. It was time for Peddle and his team to
Chuck Peddle and his wife now had four children,
but the stresses of Peddle leaving his secure job
at GE caused the marriage to disintegrate. They
divorced in 1971. "I put a bag of clothes in
my [Austin-Healey] Sprite and drove away,"
he says. Within weeks, in what Peddle terms a 'planned
transition', Peddle remarried a voluptuous blonde
with two children from a previous marriage. "I
took some time out, because there was a change in
life; going through the divorce and all that,"
says Peddle. In 1972, Peddle tried to start a Word
Processing company using Digital Equipment Corporation
(DEC) time-sharing systems. "We actually did
the first on-line text processing system, setting
type for newspapers," he says. Peddle was too
early. "That company couldn't make it either."
The experience gave Peddle valuable knowledge he
would need to develop the next generation of microprocessors.
"I had done all the microelectronics and knew
why a microprocessor needed to happen, and how to
make a microprocessor, and how to make things that
used microprocessors," he says. "But I
didn't have a microprocessor because they weren't
around yet." In 1973, Peddle spotted an employment
ad from Motorola for their new microprocessor program
in Mesa, Arizona. He recalls, "I went down
and talked to the guy who was running the program,
who was a calculator guy." Peddle's experience
at GE won him the job. "He basically hired
me to finish the program." Chuck started work
at Motorola in 1973, around the time when Large
Scale Integration (LSI) of semiconductor technology
allowed the circuitry of a calculator or computer
to fit onto a single chip. As the Intel 4004 and
8008 processors were gaining popularity, Motorola
decided to enter the microprocessor market with
their own chips. A Motorola designer named Tom Bennett
created the original architecture for the 6800,
but Peddle felt it needed some changes. "They
kind of muddled their way through the architecture
for the 6800, which had some flaws in it. I was
able to fix some of those flaws but it was too late
for others," says Peddle. The final 8-bit microprocessor
had 40 pins, 4000 transistors and an instruction
set of 107 operations. Peddle also made a major
contribution to the project by designing the support
chips for the 6800. Computers had to interact with
peripheral devices like disk drives and printers,
so Peddle designed a specialized support chips for
this purpose. One chip to emerge was the 6820 Peripheral
Interface Adapter, which most people just called
the PIA chip. The 6820 became a major reason for
the eventual popularity of the 6800.
Although Motorola engineers grasped the importance
of what they had created, the management and salespeople
knew very little of microprocessors. According to
Peddle, some managers at Motorola even tried to
kill the project. "So I built a demo of the
chip using some of the hardware for my cash register
to show everybody that microprocessors really did
work," he says. The salespeople at Motorola
required an education on microprocessors but there
were no courses. "They didn't know how to sell
it, so I put together a training class for their
applications engineers," says Peddle.
Peddle was instrumental in making some of the first
deals for Motorola, including Tektronics, NCR (National
Cash Register company), Ford Motor Company, Unisys,
and Burroughs (makers of calculators). "I wound
up going into the field presenting the architecture
because I was the only one in the company who could
intelligently talk to customers and have architectural
discussions," he says. The presentations usually
ended the same way. "The guys would sit down,
we would explain the 6800, and they would just fucking
fall in love," says Peddle. However, the $300
price tag for a single 6800 processor prevented
engineers from adopting the 6800 microprocessor
in low cost products. According to Peddle, someone
would invariably say, "You're charging too
much for it. What I want to use it for is not to
replace a minicomputer. I want to use it to replace
a controller, but at $300 per device it's not cost
effective." Armed with this knowledge, Chuck
Peddle had an epiphany. He recognized the vast market
for cost-reduced microprocessors. Both Intel and
Motorola were overlooking an important market. Peddle
slavered at the possibilities. In August 1974, Motorola
publicly introduced the 6800 chip for $300. The
6800 would eventually become successful for Motorola,
in no small part to the efforts of Chuck Peddle.
It almost became too successful and Motorola saw
no reason to attack other markets.
Peddle pushed Motorola for a cost-reduced microprocessor.
According to Peddle, "One week I returned to
Motorola after one of these trips, and I had a letter
there, formally instructing me Motorola was not
going to follow a cost reduced product. I was ordered
to stop working on it," recalls Peddle. Undeterred,
Peddle wrote a letter (which he still owns today)
saying, "This is product abandonment, therefore
I am going to pursue this idea on my own. You don't
have any rights to it because this letter says you
don't want it." From that moment on, Peddle
stopped working on microprocessors for Motorola.
He continued teaching classes and finished the 6520
PIA chip he was developing, but his true focus was
finding a way to make his low-cost microprocessor.
While still employed at Motorola, Peddle tried raising
money to fund his microprocessor. He visited Mostek
(not to be confused with MOS Technology) and talked
to prominent venture capitalist L.J. Sevin of Sevin-Rosen
(responsible for funding startups like Compaq, Lotus,
Cyprus, and Mostek), but he was not interested in
Peddle's idea. Peddle continued talking to people
in the semiconductor business. One day, Peddle ran
into an old friend from GE who now worked at Ford
Motor Company. His friend mentioned John Pavinen,
another ex-GE employee who was now running a semiconductor
company near Valley Forge, Pennsylvania. "When
I started looking around for partners, I knew Pavinen
was a killer computer guy," he recalls. "I
called him up. He said, 'Come on down. Let's talk
Peddle flew to Pennsylvania to examine MOS Technology.
The facility was located at 950 Rittenhouse Road,
a 14-acre site in an industrial park, called the
Valley Forge Corporate Center. Peddle was impressed
with the small firm. It had good credentials and
many customers, among them a calculator company
named Commodore. Satisfied, Peddle sat down to discuss
his new project with John Pavinen. "Pavinen
immediately loved the idea of doing the product,"
says Peddle. The two discussed the specifications
for the microprocessor, but MOS Technology was only
capable of manufacturing chips using the P-channel
process. Peddle wanted the more advanced N-channel
process. Pavinen felt he could deliver the N-channel
process. "He had taught himself process development
when he was working at General Instrument, and was
really good at it," says Peddle. "He considered
himself to be a competitor to [Andrew] Grove [of
Intel]. He was convinced he could do a five-volt
N-channel process in the same amount of time it
would take me to develop the microprocessor."
The partnership between Chuck Peddle and John Pavinen
seemed to hold promise. For his part, Pavinen badly
needed a new product to replace the shrinking calculator
market. MOS Technology engineer Al Charpentier describes
the situation that caused MOS Technology to accept
Chuck Peddle's proposal. "Here's a company
that is somewhat dying, and the calculator margins
are shrinking," he says. "They wanted
market share." Pavinen told Peddle, "Move
your people and we'll set up a second group within
the company. You run your own show."
As Motorola publicly unveiled the 6800, Chuck Peddle
and seven coworkers from the engineering and marketing
department left Motorola to pursue their own vision.
The team included Will Mathis, Bill Mensch, Rod
Orgill, Ray Hirt, Harry Bawcum, Mike James, Terry
Holt (Terry later became president of S3, a semiconductor
company that supplied a popular all-in-one chipset
for IBM PC compatible computers), and Chuck Peddle.
The departure of several of Motorola's top engineers
seriously drained the company of much needed expertise
on the eve of the 6800 debut. Pavinen gave Peddle
and his team a stake in the company. "The deal
was, if the microprocessor took off, we would have
a piece of the company," he recalls. On August
19, 1974, the team started work on their new processor
at MOS Technology. With Chuck Peddle and his band
of engineers, MOS Technology would radically change
the market for computers.
In 1969, a large industrial manufacturing company
called Allen-Bradley wanted to enter the new semiconductor
business. They financed the creation of MOS Technology.
The three men who founded and operated the new startup
had previously worked with Peddle at GE. They were
Mort Jaffe, Don McLaughlin, and John Pavinen. For
the first five years, MOS Technology supplied calculator
chips and other semiconductor parts to the electronics
industry. Then Chuck Peddle and his team of ex-Motorola
employees began working on a revolution within the
microprocessor industry. This revolution would occur
at Valley Forge, Pennsylvania on the East Coast,
approximately 100 miles inland from the Atlantic
Ocean and 20 miles from Philadelphia. It was an
appropriate place for a revolution. Almost 200 years
earlier, Valley Forge was the turning point in the
American Revolution when General George Washington's
tired and bloodied troops retreated to Valley Forge
for the winter, only to emerge with an unwavering
offensive. Chuck and his band of engineers would
also retreat for the winter, and in the following
summer, they would unleash a powerful new weapon.
In the seventies, Valley Forge was a small, dispersed
town with a population of about 400 people. MOS
Technology headquarters resided in the peaceful
setting, along a lone country road surrounded by
wildlife. Street names like Adams Avenue, Monroe
Boulevard, Madison Avenue, and Jefferson Avenue
celebrated the revolutionary past. Directly across
the road from MOS was a beautiful golf course, General
Washington Country Club, tempting the MOS executives
to squeeze in a round of play. Less than a mile
away was the Audubon Wildlife Sanctuary, a park
filled with serene trails where Canadian geese gathered
in the fall while migrating south. Horse trails
snaked in and out of the surrounding countryside.
Riders would often emerge from the bushes and stare
at this out of place high-tech firm. They could
scarcely understand what was going on inside.
The headquarters hearkened back to the 1950's. It
was a box-shaped two-story building with glass windows
along the front and sides. Stray golf balls frequently
bounced off the front windows, occasionally leaving
small bullet sized holes that no one ever repaired.
To the side and rear of the building were two huge
parking lots, largely deserted since most people
preferred to use the circular driveway out front.
The engineering lab on the second floor was the
fountainhead of ideas for the company. This was
where engineers invented the semiconductor chips.
The engineers subdivided the lab into a maze of
smaller rooms, each with a specific task. It was
in this environment that Chuck Peddle would plan
the centerpiece of his revolution. Although Peddle
envisioned a true microprocessor, it is a delicious
irony that he did not design it for computers. "It
was never intended to be a computer device. Never
in a million years," he reveals. Instead, he
envisioned the microprocessor for home electronics,
home appliances, automobiles, industrial machines
– just about everywhere except personal computers.
"If we were going to do a computer, we would
have done something else."
Price was the key to achieving widespread use of
his microprocessor. Peddle envisioned a series of
processors of varying size and complexity. The full
featured microprocessor would sell for between $20
and $25. This meant the actual production cost could
not exceed $12; otherwise, it would be unprofitable.
(Generally, the manufacturer doubles the manufacturing
cost when selling to a dealer, who then doubles
the price again to sell to the consumer. Since MOS
Technology would sell the microprocessor directly
without an intermediary, they only doubled the manufacturing
cost once.) With microprocessor economics, MOS desperately
needed to sell high volumes of chips to overcome
their design costs. According to Al Charpentier,
the burgeoning microprocessor industry was having
problems establishing itself. "You've got a
new technology that everybody is interested in but
it's not taking off," he explains. "The
numbers back then were tiny. They were scientific
curiosities because they were so expensive. So [MOS]
wanted to drive the interest level way up, and that's
how the $20 price tag got hammered in."
The price seemed unreasonably low compared to Motorola.
"We wanted to own the market," says Peddle.
"If you want to own a market, you take a price
point that you make good money at, and you make
sure nobody else can play with you. You build big,
fast companies that way." When asked why he
did not chose a slightly higher price, say fifty
dollars, Peddle says, "Because then I don't
get the design in. At twelve bucks and fifteen bucks
and twenty bucks I get design-ins everywhere."
Peddle was after widespread success. "We wanted
people to put microprocessors everywhere. We were
trying to change the world." The ex-Motorola
employees split into three groups, each with their
own areas of expertise. "We came in and effectively
took over two or three rooms, and operated totally
independent of the rest of the company for a long
time," says Peddle.
Chuck Peddle, Will Mathis, and Rod Orgill would
collaborate to design the initial architecture for
the new microprocessor. "It was just the perfect
product, the perfect time, the perfect team,"
says Peddle. The architects' task was similar to
designing a small city, except the streets in this
city would be paved with metal. Electrons would
inhabit their city, traveling the streets until
they reached a transistor. Timing within this little
city would be critical, otherwise traffic would
halt, causing the chip to lock up.
Peddle and his group intentionally numbered their
chips starting with 6500, so it would sound similar
to the Motorola 6800. "It was a cheaper version
of the 6800 and there was intended to be a whole
string of them," he explains. "In hindsight,
with many years and lawsuits behind us now, it was
designed to sound like the 6800."
The first chip in the series was the 6501, which
could drop into a 6800 slot. "It was definitely
not a clone," says Peddle. "Architecturally
it's a 6502. The only difference is it plugs into
Motorola socket." Peddle explains the 6501
strategy. "We were competing in a market where
we were selling to people who might have bought
the 6800," he says. "Having a plug-in
compatible version was just a marketing game."
Unfortunately, socket compatibility would later
provoke Motorola. The centerpiece of their project
was the 6502 microprocessor. "The 6502 was
what we were driving for," he says.
To create the architecture of the chip, the three
engineers created a simple diagram to represent
the structure of the chip. "We would start
with a basic block diagram," says Peddle. Some
of the most important design work took place away
from MOS Technology. "We put some of the more
significant stuff in while drinking booze at Orgill's
house one night," says Peddle. "The way
to do really creative work is to work on it and
then sometimes you've got to let it alone. If somebody
gets a bright idea at a party, you take time out
and you go argue about it. We actually came up with
a really nice way of dealing with the buses that
came out of a discussion at Orgill's."
Al Charpentier was one of the calculator chip designers
at MOS Technology. He witnessed Peddle driving his
team to build the new processor. "Chuck was
an interesting character," he recalls. "He
could be a bit pompous, but he had a vision and
he was pushing that vision. Chuck was the visionary."
Peddle created a concept called pipelining, which
handled data in a conveyor belt fashion. Instead
of stopping while the microprocessor performed the
arithmetic, the chip was ready to accept the next
piece of data right away, while internally it continued
processing data. This feature would make the chip
faster than anything produced by Intel or Motorola
at the time. A one-megahertz 6502 was equivalent
to a four-megahertz Intel 8080.
The semiconductor team not only developed a microprocessor,
they also developed the supporting chips. The first
was the 6520 PIA chip, which was a clone of the
Motorola 6820 PIA. One chip, called the 6530, contained
1 kilobyte of ROM, 256 bytes of RAM, a timer, and
two IO ports. This allowed engineers to assemble
a complete computer using only two chips. The team
also developed 128-byte 6532 RAM chips. One by one,
the architects passed their designs to the layout
people. The layout team consisted of two main engineers:
Bill Mensch and Rod Orgill. A third engineer, Harry
Bawcum, aided the layout artists. It was their task
to turn an abstract block diagram into a large-scale
representation of the surface of the microprocessor.
Orgill was responsible for the 6501 chip, Mensch
Chuck Peddle originally hired Mensch at Motorola
after Mensch graduated from the University of Arizona.
"Mensch was literally right out of school,"
says Peddle. One of eight children, Mensch grew
up in a small farming community in Pennsylvania.
According to Mensch, "I lived on a dairy farm,
got up at 4:30, milked the cows, and went off to
school." (The quote is from an interview with
William Mensch by Rob Walker, Silicon Genesis: An
Oral History of Semiconductor Technology. (Atherton,
California, October 9, 1995)) At Motorola, Peddle
was impressed with Mensch's natural talent. "He
was just spectacular doing N-channel design and
layout. He was the worlds best layout guy,"
raves Peddle. Mensch was dependable, which made
him a favorite with MOS engineers. "Bill was
a good guy," says Charpentier. "He was
very knowledgeable and knew what he was doing."
Rod Orgill, the youngest member of the team, worked
at Motorola on the fabrication process of the 6800.
Out of everyone on the team, Orgill had the most
diverse set of abilities. Peddle relates, "Rod
was a combination of chip designer and architect."
For the first time in his life, Orgill would acquire
layout abilities as an understudy to Mensch. Peddle
claims the 6501 was a marketing game, but Rod Orgill
believed the 6501 would be more successful than
the 6502. According to Mensch, "We made a bet
and said who's going to have the highest volume
and Rod says, 'There's no question: following Motorola's
marketing, the 6501 will surpass your  design
and yours won't even have a chance.'"
The small group of young engineers worked in a small
room on the second floor containing several large
art tables. Here, Mensch and Orgill brooded over
thick sheets of vellum paper. The layout consisted
of thousands of polygons, each a specific size and
shape. Thin lines called traces connected the polygons,
creating a complex circuit. Incredibly, the engineers
created the layout in pencil, one component at a
time. The task was formidable, with a completed
diagram containing approximately 4,300 transistors.
(In contrast, the Intel Pentium 4 released in 2000
has 42 million transistors.)
Near the end of the design process, disaster struck.
The engineers realized their architecture would
not fit within the allotted area of the microchip.
"When we sat down to optimize the system, we
discovered we were 10 mills too wide," says
Peddle. "The design was almost done. Mathis
and I put a big piece of paper down on a table and
sat there and optimized every line until we got
rid of 10 mills." The engineers were on a tight
deadline to have the product ready for the upcoming
Wescon show in September. They obsessively searched
for ways to recycle lines in the schematic, thus
reducing the area. Peddle grimly recalls, "Mathis
and I had to keep redoing the architecture to make
sure they stayed within that area."
To print the microchips, the engineers used a process
called Metal Oxide Semiconductor, or simply MOS.
This process used six layers of different materials,
printed one on top of the other, to build the tiny
components on the surface of a silicon wafer. This
meant the layout artists had to create six different
diagrams, one on top of the other. The process required
incredible precision because the layers had to line
up exactly. The surface of the chip was necessarily
dense in order to fit everything into a small area,
so the artists squeezed transistors and pathways
close to each other. If a single layer deviated
by more than a few microns, it could touch another
pathway and create a short circuit. After the layout
was completed, the engineers faced the soul-draining
task of rechecking their design. The most sophisticated
tool in this process was a small metal ruler, or
more accurately, a scale. Herd recalls, "They
would take their scales out of their pocket –
don't call them a ruler – and they would measure
for months! They would measure each transistor and
make sure it was two millimeters by point seven."
Mensch, Orgill and Bawcum sat bleary-eyed over their
drawings, sometimes for 12 hours a day, painstakingly
measuring every point on the layout. They measured
the size of components, the distance between components,
the distance between traces, and the distance between
traces and components. With a touch of sympathy
in his voice, Herd explains, "You could be
a really talented designer but if you couldn't check
your design with the mind-numbing repetitiveness,
your stuff didn't work and you would get a bad reputation."
Mensch and Orgill kept small cots in the room so
they could work for long uninterrupted periods followed
by a few hours rest. "With the semiconductor
guys, that tends to be something you do when you
are doing that at a certain level of design,"
recalls Peddle. "You tend to just keep going."
Even today, Peddle is still in awe of Mensch's ability
as a layout engineer. "Bill has this unique
ability to look at the requirements for a circuit,
and he can see how it is going to layout in his
head," he says. "He's just totally unique.
Nobody matches Mensch."
In June 1975, the chip design was ready. It was
up to the process engineers to imprint the design
onto tiny silicon wafers. Months earlier, Pavinen
promised Peddle he would have the N-channel process
ready. Pavinen was true to his word. "He gave
me everything I wanted," says Peddle. The procedure
to shrink a large, dense design onto something smaller
than a thumbtack is both mysterious and under-appreciated.
In many ways, it is also the most important step
and, if intelligently planned, it can reduce the
cost of a microchip dramatically. Engineers simply
call this step the process. When Pavinen and his
two partners founded MOS Technology, it was their
explicit goal to be the best process company in
the business. "MOS Technology's business premise
when they started was that they knew how to process
better than other people," says Peddle. Engineers
at the time documented very little of what they
did, and most process engineers stored the process
in their heads.
In order to print the transistors and other components
to a silicon chip, the engineers had to create a
mask. The mask blocks out everything except for
the parts of the chip they want, much like a stencil
blocks spray paint to produce letters. The mask
relied on the principles of photography and light.
To transform the circuit diagram into a mask, the
engineers used a material borrowed from the graphics
industry called Rubylith. Rubylith is a sheet of
acetate film with a red base covering the surface.
Since the semiconductor industry was in an early
stage of development, the tools to transfer the
diagram were outrageously primitive. According to
Bil Herd, "They were doing chips by cutting
Rubylith with razor blades. They would kick their
shoes off, push some tables together, and jump up
on them." It was up to engineers Mike James
and Harry Bawcum to perform the tedious task of
cutting out pieces from the Rubylith to form the
mask. According to Bob Yannes, who arrived at MOS
just after the Rubylith years, "I can't imagine
using that stuff. You're looking at this huge red
plastic thing in front of you and you're supposed
to peel off the parts that are supposed to stay
and leave the parts that are supposed to go away.
Unless you were very careful, you got the two confused
and you ended up peeling off the stuff that is supposed
to go away. Then you start taping it back down again."
With engineers crawling all over the huge sheets
of acetate film, it was vital sharp toenails were
not exposed; otherwise they would drag over the
surface and slice into the acetate. Engineers were
not known for they attention to their appearance
and it became vital to keep pairs of fresh socks
available. "Everyone would wear fresh socks
with no holes in the toes for getting on the table,"
explains Herd with some amusement. Orgill and Bawcum
created six Rubylith masks for the 6502 chip, one
for each layer. Once completed, the engineers photographically
reduced each of the large sheets of Rubylith to
create a smaller negative. Engineers chemically
etched a tiny metal mask using this negative. The
technicians would eventually use this mask, almost
like a rubber stamp, to create thousands of microprocessors.
Precise robotic machines used the tiny metal mask
to duplicate the pattern over the entire surface
of the silicon wafer. In the early seventies, the
metal mask made contact with the surface of the
silicon so the electrons could flow through the
mask, imprinting the design to the surface. "People
used to have what they call contact masks, which
were pretty destructive on the mask," recalls
Peddle. "They actually put the mask on the
chip and it got worn out very quickly." Every
time a mask wore out, the designers had to go through
the laborious process of making a new mask.
At MOS Technology, John Pavinen pioneered a new
way to fabricate microprocessors. "They were
one of the first companies to use non-contact mask
liners," says Peddle. "At that time everybody
was using contact masks." With non-contact
masks, the metal die did not touch the wafer. Once
the engineers worked out all the flaws in the mask,
it would last indefinitely. Pavinen and Holt handed
off the completed mask to the MOS technicians, who
began fabricating the first run of chips. Bil Herd
summarizes the situation. "No chip worked the
first time," he states emphatically. "No
chip. It took seven or nine revs [revisions], or
if someone was real good they would get it in five
or six." Normally, a large number of flaws
originate from the layout design. After all, there
are six layers (and six masks) that have to align
with each other perfectly. Imagine designing a town
with every conceivable layer of infrastructure placed
one on top of another. Plumbing is the lowest layer,
followed by the subway system, underground walkways,
buildings, overhead walkways, and finally telephone
wires. These different layers have to connect to
each other perfectly; otherwise, the town will not
function. The massive complexity of such a system
makes it likely that human errors will creep into
After fabricating a run of chips and probing them,
the layout engineers usually have to make changes
to their original design and the process repeats
from the Rubylith down. "Each run is a couple
of hundred thousand [dollars]," says Herd.
Implausibly, the engineers detected no errors in
Mensch's layout. "He built seven different
chips without ever having an error," says Peddle
with disbelief in his voice. "Almost all done
by hand. When I tell people that, they don't believe
me, but it's true. This guy is a unique person.
He is the best layout guy in world."
With the mask complete, mass fabrication of the
microchips could begin. Fabrication occurred in
an alien-like environment on the second floor of
the MOS Technology building called the clean rooms.
These hermetically sealed rooms produced a nearly
dust free environment. The precautions were extreme,
since a single grain of dust during the etching
process could cause a miniature short circuit. To
enter the clean rooms, lab technicians were required
to don hairnets, beard nets, moustache guards, gloves,
paper booties, and white jumpsuits. "It makes
you look like a bunny," says Peddle. "We
used a lot of them." As a final measure, the
technicians walked over a sticky-mat to remove the
last traces of dust before stepping into the airlock.
Within a crimson-tinted darkroom, technicians replicated
print after print of the 6502 circuit. They coated
the round silicon wafers with thin layers of metallic
substances. After each layer, technicians placed
the wafer into a special machine that copied the
circuit from the metal mask to the surface of the
silicon wafer. Electrons flowed through the mask,
causing a thin layer to harden in the shape of the
circuit. Each wafer had the chip pattern imprinted
approximately fifty times. In another room, bathed
in yellow light, technicians developed the microchips.
This process was almost exactly like developing
a photograph. A studious technician carefully washed
each wafer with chemical solutions that removed
all but the hardened circuitry. The industrial strength
solvents went by names like trichloroethene, trichloroethane,
dichloroethene, dichloroethane, and vinyl chloride.
The technicians repeated the process six times for
the six layers, each time using a different set
of chemicals and metallic substances. According
to Peddle, "You put this mask on the device
and do whatever step you are going to do, and then
you take it off, put another mask on, and do another
The top layer was aluminum, which was the best conductor.
Beneath the aluminum were various semiconductors
such as Germanium. Each layer went by a different
name, such as diffusion layer, buried contact, depletion
layer, polysilicon, poly-metal contact, and metal.
With all six layers applied, the wafers entered
an oven to bond the circuitry. Technicians then
added a passivation layer (This final layer, called
the passivation layer, was difficult for Pavinen
to perfect. For mysterious reasons, small pinholes
appeared in the passivation layer. After a year
or so, the areas on the chip around these tiny holes
would begin to oxidize and the chip ceased functioning.)
to protect the fragile metallic circuitry from oxidation.
After applying the passivation layer, a machine
sliced the wafers into individual chips, each smaller
than a fingernail.
The chemical etching process used dangerous industrial
solvents. Inevitably, the solvents evaporated into
the air, which worried some of the staff. Robert
Russell, an early Commodore employee, chuckles about
the general indifference regarding this threat.
"MOS had a little cafeteria at the back alongside
the production line," he explains. "They
had a chemical release in the production line that
turned all your blueprints that were hanging on
the walls different colors. You would come in and
they would all be yellow or green. You kind of hoped
that wasn't happening when you were breathing it."
"The production of semiconductors produces
all kinds of nasty byproducts," says engineer
Bob Yannes. Inevitably, accidents occurred. "I
remember things happening like occasionally we'd
have a gas leak in the front end and you'd have
people walking through the building saying, 'Hurry!
Get out of the building!'" Most people were
ignorant of the dangers posed by the semiconductor
industry. "This is a time in history when everybody
looked at the clean rooms and the guys all wearing
their bunny suits, and how sterile it was, and everybody
wanted a semiconductor company in their hometown,"
says Peddle. "It was high tech, big money,
and clean as opposed to a foundry or something like
that. What they didn't realize was these guys were
dealing with the most poisonous, noxious shit in
the world, and they had to put it somewhere."
The semiconductor industry was still new in 1970
when John Pavinen and his partners created MOS Technology.
"Nobody in the semiconductor industry had a
clue about how to deal with the stuff they were
making for years," says Peddle. "John
did the best he could and he actually did pretty
The industrial solvents drained from the chip fabrication
line into a 250-gallon concrete holding tank. "They
built these double tanks and they stored it underground.
But you know, we just didn't have the technology,"
says Peddle. "Let me just make a point; John
Pavinen was a very meticulous guy, and he absolutely
designed his tanks the best he could given the environment
at the time." In early 1974, a serious disaster
occurred. Technicians monitoring the tank realized
the tank was emptier than it should have been. During
the cold Pennsylvania winters, the concrete tank
developed a small crack. "Some of their storage
tanks leaked and it leached into the ground,"
recalls Yannes. Pavinen kept the spill quiet, even
from Peddle. "We didn't join him until the
summer of 1974, and they wouldn't have told us about
it anyhow," says Peddle. "With all due
respect, they keep that stuff a lot quieter in Silicon
Valley. There's been a whole bunch of stories about
breast cancer being much higher in Silicon Valley,
and there's a bunch of other anomalies."
As the Environmental Protection Agency later determined,
the leak was the source of groundwater contamination
in the area. (According to EPA reports, in December
1986, the EPA performed a site inspection in which
they collected soil samples, surface water, and
water from nearby residential wells. Tests revealed
low levels of trichloroethene and other volatile
organic compounds in the soil and shallow bedrock
underneath 950 Rittenhouse. Furthermore, the EPA
found traces of volatile organic compounds in the
well water supply, but they did not approach dangerous
levels. MOS Technology began a soil-cleaning program
to extract the dangerous solvents, and in 1996,
the residents received public water lines from an
outside water source.) The Valley Forge Corporate
Center bordered a residential development that relied
on well water, so there was cause for concern. Fortunately,
water tests at the time indicated the solvent had
not yet entered the water table. Pavinen replaced
the faulty tank with an unlined steel tank.
After the chemical solvents etched the chips, the
technicians inserted the flecks of silicon and metal
into an easy to handle package. Today, semiconductor
companies typically place their chips in black plastic
shells with silver pins. Back in 1975, MOS Technology
placed their microprocessors in distinctive white
ceramic shells with forty gold plated pins.
As if a price drop from $300 to $25 was not radical
enough, Peddle and his team planned to release an
ultra-low cost microprocessor called the 6507. "Our
goal was to do a $5 processor," Peddle states
flatly. "The 6507, which was a subset of [the
6502], could be made at a cheaper price. It was
designed to be a really small package." The
packaging determined how cheaply Peddle could sell
his chips. "Packaging costs money and pin outs
cost money," explains Peddle. "Back in
those days, those big 40-pin packages were very
expensive." The 6507 contained only 28 pins.
In a perfect world, every single chip would work.
If they fabricated 10,000 chips, they would ideally
have 10,000 working chips. However, imperfections
snuck in from every imaginable source. Inconsistencies
in the etching process caused flaws. Small particles
of dust getting in the way of the mask caused flaws.
Even impurities in the silicon wafer produced flaws.
The number of flaws the engineers could defeat determined
the chip yield. Technicians methodically tested
every single chip to determine if it worked. In
1975, most chipmakers considered a 30% yield to
be quite successful. The industry simply discarded
the remaining 70%. The process was inherently inefficient
and resulted in monumental chip prices. If Pavinen
wanted to achieve low cost microprocessors, he would
have to use every trick available to raise the yield.
In the seventies, most semiconductor houses tested
their chips with a Fairchild Century system. The
huge machine occupied almost an entire room and
cost almost a million dollars. As Bill Mensch explains,
"We couldn't afford them at MOS Technology."
Instead, Mensch constructed a small handheld chip
tester that resembled a computer motherboard covered
in IC chips. Every single chip from MOS Technology
was hand tested by the homebrew device for the first
year and a half of 6502 production.
Through careful planning and innovation, MOS Technology
achieved a chip yield of 70% or better. Peddle attributes
this success to Pavinen and his non-contact mask
process. "Because they could afford to spend
a lot more money making a perfect mask, they got
much better yields," he says. The low production
costs meant Peddle's vision would come true.
Selling the Revolution
The team now had hundreds of working microprocessor
chips, but their battle was just beginning. "We
brought it out on schedule, on cost, and on target,"
says Peddle. With almost no budget for advertising,
it would be up to Peddle and his team to create
as much fanfare as possible. "We wanted to
launch the product in a spectacular way because
we were a crummy ass little company in Pennsylvania,"
explains Peddle. At first, he attempted to garner
free publicity from newspapers. "Some people
liked the story and put us on the cover of their
newspaper, which hyped us up," he recalls.
Prior to launching the 6502, MOS Technology hired
Petr Sehnal, a friend of Chuck's from his days at
GE. "Petr was a Czechoslovakian intellectual
who came over to this country," recalls Peddle.
"He was kind of acting as a program manager
and getting everything ready for the show, and he
was the West Coast sales manager." To reach
their target audience, Sehnal wanted to take the
6502 to the masses. The annual Western Electronic
Show and Convention (Wescon) was showing in San
Francisco in September. Sehnal knew the show would
be the best place to launch Peddle's revolutionary
The microprocessor would be useless to engineers
without documentation. Peddle recalls, "We
were coming down to launching, and my buddy [Petr
Sehnal] kept telling me, 'Chuck, you've got to go
write these manuals.' I kept saying, 'Yeah, I'll
get around to it.'" Peddle did not get around
to it. With Wescon rapidly approaching, and no manual
in sight, Sehnal approached John Pavinen and told
him, "He's not doing it." "John Pavinen
walked into my office with a security guard, and
he walked me out of the building," recalls
Peddle. According to Peddle, Pavinen gave him explicit
instructions. "The only person you're allowed
to talk to in our company is your secretary, who
you can dictate stuff to," Pavinen told him.
"You can't come back to work until you finish
the two manuals." Peddle accepted the situation
with humility. "I wrote them under duress,"
he says. Weeks later, Peddle emerged from his exile
with his task completed. The 6502 would have manuals
The team planned to sell samples of the 6501 and
6502 microprocessors at Wescon, along with the supporting
chipset. "We then took out a full-page ad that
said, 'Come by our booth at Wescon and we'll sell
you a microprocessor for twenty-five dollars.' We
ran that ad in a bunch of places," recalls
Peddle. The most prominent advertisement appeared
in the September 8, 1975 issue of Electronic Engineering
Times. Things were going well until his team arrived
for the show. Peddle recalls, "We went to the
show and they told us, 'No fucking way you're going
to sell anything on the floor. It's not part of
our program. If we had seen these ads we would have
killed you.'" Having come so far and worked
so hard, Peddle and his team were not ready to give
up. "They told us this just enough in advance
that we took a big suite, the McArthur Suite, at
the St. Francis Hotel," says Peddle. MOS Technology
would sell their contraband microchips from booth
1010 by redirecting buyers to a pickup location,
much like drug dealers. "People would come
by the booth and we'd say, 'No you can't do it here.
Go to the McArthur Suite and we can sell you the
processors," recalls Peddle. "We became
so popular people would get on the bus at the convention
center and ask, 'Is this the bus to the McArthur
suite?'" The promise of low-cost microprocessors
caused a sensation. Many people thought the $25
chip was a fraud or assumed it performed poorly.
Peddle was confident these questions would resolve
themselves once people started using his chips.
Eager hobbyists and engineers lined up in the hall
outside the McArthur Suite. Chuck's wife Shirley
greeted the engineers, collected their money, and
handed out chips. "My very pretty wife was
sitting there, and we had this big jar full of microprocessors,"
recalls Peddle. "You walked up, we would take
your microprocessor off the top, and she would put
it in a little box for you." The large jars
full of microchips seemed to indicate MOS Technology
was capable of fabricating large volumes of the
6502 chip. This was subterfuge. "Only half
of the jar worked," reveals Peddle. "The
chips at the top of the jar were tested and we knew
the ones on the bottom didn't work, but that didn't
matter. We had to help make the jar look full."
Shirley Peddle also sold manuals and support chips.
Peddle explains, "You could buy this little
RAM/ROM I/O device for another $30 and we would
sell you the two books we wrote, which turned out
to be very popular." The manuals gently introduced
readers to the concepts of microprocessor systems,
explaining how to design a microprocessor system
using the 6500 family of chips. It was a bible for
microcomputer design. "Everyone told us how
good they were to use," he recalls. "We
were very proud of that."
After completing their purchases, customers entered
the suite. Here, Peddle demonstrated the 6501 and
6502 chips, along with tiny development systems
such as the TIM and KIM-1 microcomputers. "They
would go around the suite and they would see the
development systems, and they would find out how
to log onto the timesharing systems so they could
develop code," he says. "Then they would
The purpose of selling the chips at Wescon was not
to raise money. It was to cultivate developer interest
in the chip. If all went well, the engineers and
hobbyists would go out into the world and design
products with the 6502. Waiting in line outside
Chuck's hotel room was Steve Wozniak, who thought
he might be able to use the chip for a homebrew
computer project. Peddle's documentation undoubtedly
In the months that followed, engineers and hobbyists
began reporting success with the MOS microprocessors.
Thanks to a review in the November issue of Byte
magazine, the chips soon gained a larger following.
Dan Fylstra, founder of the company that would someday
sell the legendary VisiCalc spreadsheet, wrote an
article titled, 'Son of Motorola'. People soon became
convinced that the 6502 chip was a legitimate microprocessor.
The 6502 did not immediately improve MOS Technology's
finances, but it had a major impact on the computer
industry. "It spawned a whole class of users,
called hackers back then," says Charpentier.
"It changed the world," says Peddle. In
September 1995, as part of their 20th anniversary
edition, Byte magazine named the 6502 (Even pop-culture
recognizes the 6502 chip. The animated television
show Futurama revealed that one of its characters,
a robot named Bender, has a 6502 microprocessor
for a brain. Futurama, "Fly & the Slurm
Factory". (Season 2, Episode 4)) one of the
top twenty most important computer chips ever, just
behind the Intel 4004 and 8080.
Chapter 12: The Commodore 64, 1981-1982
With less than two months to build a complete computer
system, the engineers rarely left the MOS Technology
building. "In the middle of the building lab,
we took over one corner of the room and worked 20
hours a day, 7 days a week to get the prototypes
running," says Russell. As managers, Charles
Winterble and Al Charpentier did not perform hands-on
work on the VIC-40. "It was Bob Yannes, me,
and Dave Ziembicki the technician who really went
off and did the Commodore 64," says Russell.
"Luckily we had a guy like Charlie Winterble
who let us go off and do that when we were supposed
to be making the P and B stuff work."
Designing a full computer system was a new challenge
for Bob Yannes. "I was still in the chip
group so I wasn't really supposed to be working
on systems," says Yannes. "The only
reason I ended up doing the C64 was because I
was the only one who knew enough about the chips
and how to put them together in a timely fashion."
With such a tight schedule, Yannes and Russell
began laying out the architecture of the computer.
"Bob [Yannes] and I sat down and came up
with the hardware architecture," recalls
Russell. Yannes was an assiduous engineer by nature.
For two short days, Yannes worked in his office
and the drafting area to design the architecture
for the VIC-40. "It was a pretty easy architecture,"
says Yannes. "I just designed the most minimal
system I could with the fewest number of components.
There's not a whole lot of stuff in there. There's
the VIC chip, the SID chip, and there's 64K of
Almost none of the design came from the VIC-20.
"There were very few chips that were used
in the C64 that had ever been used before,"
says Yannes. Only the serial port, cassette port,
and user port remained the same. It also used
the same joystick connecter, except there were
two. Rather than use the same bulky cartridge
system of the VIC-20, Yannes decided to borrow
technology from the Max Machine. "Since the
Max Machine was already in progress, I decided
to make one of the C64 memory configurations match
the Max so that it would be able to use Max game
cartridges," explains Yannes. "When
you plug the game cartridge in, it would automatically
collapse the memory map of the Commodore 64 to
look like the Max Machine."
The VIC-40 was essentially a computer with a
game console built into memory. The engineers
wondered how they could create such a complex
memory layout before CES. They found their salvation
in the Programmable Logic Array chip (PLA). According
to Russell, "I remember finding that chip
and saying, 'Oh, that will do exactly what we
want!'" The PLA chip acted like glue to hold
the different parts of the system together. Yannes
could simply insert the PLA chip and program it
later. "I didn't have time to design all
the logic before they laid the PC board out, so
I just took a PLA and named the signals I needed
and told them to lay that out," recalls Yannes.
"While they were laying it out I could figure
out the coding for the PLA. That got us to the
When engineers need to build a circuit quickly,
they use thin wires and a special wire wrap tool
to connect the chips together. However, Yannes
believed it would be inadequate. "You really
couldn't do a wire wrap with dynamic RAM because
the timing was too tight," says Yannes. Instead,
the engineers would fabricate a printed circuit
To allow time to develop software, Yannes left
nothing to the last minute. "We had to have
a working circuit board practically a month before
that to get the software working because we wanted
to show it running with Basic," says Yannes.
"It was going to be perfect," says
Russell. "We made it simple and clean. We
cut boards and everything in one month."
Since Russell's move to the East Coast, he and
Yannes developed a close relationship. "We
worked hand in hand on the C64. We spent all that
time in the lab," says Russell. "We
were best friends." Bob Yannes also looks
back fondly on the friendship. "We hung out
a lot together back then," he recalls. "He
was transplanted from Iowa to California to Pennsylvania
so he was probably [alone]; at least I was always
in my environment." According to Yannes,
in between work, the two engineers took in science
fiction films from the early eighties. "We
were going to movies together and all kinds of
stuff," says Yannes. "We were both single
geeks without any social life." Yannes remembers
seeing two groundbreaking films employing state
of the art computer graphics, Tron and The Last
The VIC-40 schedule destroyed the two largest
holidays of the year for Yannes and Russell. "It
had us jumping through hoops to try to get some
totally new thing that we hadn't even intended
to work on and try to get it done between Thanksgiving
and early January with Christmas break in the
middle," says Yannes. "I remember checking
the PC board layout over Thanksgiving weekend.
That's how tight the timeframe was on that."
Although the new assignment would cause Yannes
to miss the holiday season completely, he did
not think of Jack as a Scrooge. "It didn't
matter," he says. "I was living at home
and I wasn't married or anything. I thought this
Throughout the development of the project, the
engineers kept the project a secret from others
at Commodore. "We didn't talk to marketing,"
recalls Winterble. "We bounced ideas off
Jack, but he didn't really care about the specifics
of it." Not even John Feagans knew about
the project, even though the computer used his
kernel code. "He didn't do code work on the
C64 at all because he never even knew it existed
until it came out," says Russell. "It's
his architecture and it's me building on what
I did on the VIC-20."
Out of all the engineers at Commodore, Yannes'
philosophy of low-cost computers was the closest
to Jacks. "I tried to design the cheapest
possible thing I could because that was just my
nature," he explains. "I didn't like
expensive things, I didn't have very much money,
and I didn't see any reason why this stuff needed
to be expensive."
Although the P and B computers had specialized
cases, no one tried to design a new case for the
VIC-40. "If you've ever wondered why the
C64 has the same case as the VIC-20, it's because
we didn't have any time to tool anything up,"
says Yannes. "We just put it in a VIC-20
case and spray painted it. Everything about the
Commodore 64 is the way it is because of just
an unbelievably tight time constraint on the product."
In retrospect, Charles Winterble believes the
decision to use the VIC-20 case ended up wasting
more time. "One of the design criteria which
we chose, which was a mistake, was we said, 'Gee,
let's put this all into VIC-20 plastic.' That
was wrong because we didn't have enough room,"
explains Winterble. "We spent so much time
and resources trying to make the motherboard fit
inside that stupid VIC-20 case."
The engineers also had to choose colors for the
text and background. "Blue and white is what
we used, because that gave you the best color
contrast, other than black and white, which was
too boring," says Charpentier. "We wanted
the people to see those colors."
Problems with the chips remained well into December.
According to Charpentier, "We literally had
gotten the video chips a couple of weeks or a
weekend before the [CES] show."
By the end of December, after slightly more than
a month, the design was complete. Commodore now
had a computer they could show to the world at
CES. Yannes was understandably proud. Russell
began developing demonstrations of the VIC-40
computer. "All that stuff was originally
Basic with just a million poke statements,"
says Russell. "You didn't write assembly
language for those early demos; you poked in assembly
language. We're talking some ugly old Basic code
for the original demos." A Commodore engineer
named Fred Bowen helped create a playful demo
of a small man who walked out onto the screen
and showed off all the features of the VIC-II
and SID chips. "Freddie Bowen wrote a lot
of the stuff," says Winterble. "We had
a sprite guy with some music playing," says
Russell. "We had the transparency and stuff
like that to show the sprites. I can remember
doing the coding with Yannes trying to get stuff
to work." John Feagans, who remained on the
West Coast, also developed some demonstration
software. "I remember John Feagans had done
some music stuff to demonstrate some of the sound,"
says Yannes. "They had different music programs
for various PET's along the way. I think he just
converted them to play whatever library of songs
Working together in the small lab, the two engineers
passed time creating new music using Yannes' SID
chip. "I remember sitting in the lab with
a prototype and Yannes is there and it's the day
before Christmas," recalls Russell. "We
couldn't get good radio reception in there, so
we're creating music with the SID to listen to."
Surprisingly, Robert Russell had a disk drive
functioning with the VIC-40 in time for CES. "We
loaded them in from a 1540 drive," says Russell.
By the end of December, the team had multiple
VIC-40s. "We had built two or three at that
point in time that were running pretty good,"
says Russell. It was a remarkable achievement
to have working computers for CES, especially
considering the engineers had not even started
the VIC-II and SID chips until April of 1981.
"Nine months later we had enough working
prototypes and we were able to go to the show,"
says Winterble. "So much of the Commodore
64 was just the way it was because of the constraints
of time, and I think it actually made it a better
product to be honest," says Yannes. "We
didn't have time to fiddle with things and change
it around too much." The final verdict on
the computer would come at CES.
The Winter CES rolled around on the first weekend
of January. "When you worked for Commodore,
you always had to have something for the Winter
CES," says Yannes.
The night before departing for Las Vegas, the
engineers prepared to transport their delicate
prototypes. "We were putting the things together
and packing them up to ship them," recalls
Yannes. Once in Las Vegas, the engineers hauled
their prototypes to Jack Tramiel's suite. He would
determine whether it was worth showing to the
crowds. The tired engineers took up a corner and
readied their prototypes. "We were pretty
burned out just from getting this stuff ready
for the show," says Yannes. Robert Russell
remembers overhearing Jack and his inner circle
discussing their plans while he worked. "I
was in Jack's hotel suite preparing a demonstration,"
recalls Russell. "There was some strange
stuff I saw. He would be going over things with
the European and Asian cronies about them getting
things in and out of countries. I don't know how
legal a lot of it was. I didn't want to know some
of that stuff because it sounded like you might
end up in a barrel someplace."
It was clear to Russell that Jack and his inner
circle were prepared to do almost anything in
the name of business. "They were so bad,"
says Russell, laughing so hard he can barely speak.
"There were times they were pissed off at
certain people. Customs and duties were a lot
more complicated in those days than they are these
days. Every country in Europe was different. They
made certain threats because they were having
problems with some of the European countries as
far as how they were handling product and dealing
with all the issues."
Although the young engineers worked hard on the
VIC-40, there was no plan to display the computer.
"It wasn't even planned to be on the floor
or anything," says Russell. No one except
for Jack and his small group of engineers were
aware of the project. "We actually took it
and showed it to him and some of his cronies in
his suite in the hotel. Those guys didn't know
about it at all until we showed it."
The nervous engineers displayed the result of
over a month of compressed labor. "We told
him what it was, how simple it was, and what it
could cost," recalls Russell. "He said,
'Put it on the floor.'" As Winterble predicted,
marketing was not happy to hear about the secretive
project. "When these guys found out about
it, and found out that they were not involved
in it, then right away you can imagine: it hit
the fan," says Winterble. "It was turmoil."
With no advanced warning of the product, Kit Spencer
had to work non-stop to prepare print material
for the prototype. "The marketing guys ended
up claiming it was going to do everything under
the sun on the charts," says Russell. For
the most part, the engineers dictated the content
of the advertisements. "We told the marketing
guys what to write down and made up signs."
The VIC-40 name lasted through most of the production
design. However, marketing wanted to change the
name to match the other computers in the Commodore
lineup. They already had the P128, which was a
personal computer with 128 kilobytes. They also
had the B256, which was a business computer with
256 kilobytes. Now they had a consumer computer
with 64 kilobytes, so naturally it became the
C64. Most people just called it the Commodore
Compared to most prototype demonstrations, the
Commodore 64 was remarkably complete. "Almost
all the stuff that was put together quickly for
the show was not anything that was real,"
says Yannes. "They were smoke and mirrors.
Part of it was just to get some press at the show
and to gauge people's reaction to things. The
Commodore 64 was probably one of the most real
things that showed at a show."
Yannes was too inexperienced, too quiet, and
too much of an engineer to become involved with
demonstrating his prototype. "The only reason
I was there was in case it broke and needed to
be fixed," he explains. "I was pretty
much off to the side, but I think there were a
few times when I was called upon to explain some
of the features and capabilities, particularly
when it came to the sound."
There was not much competition at the 1982 Winter
CES. Commodore's main rival, Atari, was still
showing their Atari 400 and 800 computers. Mattel
introduced the Aquarius computer, and a company
called Spectravideo introduced the SV 318. Both
of these machines were similar to the VIC-20 in
specifications, but both were doomed largely because
of their calculator-style keyboards.
Yannes also spied on potential competitors. "One
of the things I was supposed to do at that show
was to case the competition and check what was
going on at the other places. Charlie or Al asked
me to do it," he recalls. The competition
was weak. "There wasn't really anything out
there. It really was a coup because Apple and
Atari and everybody else were just pretty much
showing what they already had with a few little
additions here and there."
The Commodore 64 was also able to demonstrate
a full line of peripherals, including the disk
drive. "It used the VIC-20 disk drive and
the VIC-20 printer and all the peripherals that
had been designed for the VIC-20," says Yannes.
"We didn't have time to design new peripherals."
The engineers also brought prototypes of the P
and B series computers, as well as the Max Machine.
Commodore hid these in a small office within the
booth and showed them to journalists, software
developers, and sometimes even trusted acquaintances
from competing companies. "We had a couple
of backroom things going on for special customers,"
Although marketing created the Commodore 64 presentation
at the last moment, it was an impressive demonstration.
"It was a rather fancy booth," recalls
Winterble. "We had a bunch of stations showing
different aspects and different parts with a skilled
person at each space. One guy was showing a game
demo, one guy was showing something else. We had
them scattered all around this booth." One
Commodore 64 demonstrated the capabilities of
the SID chip using John Feagans music program.
The beautifully strange music filled the air,
acting as a siren call for technophiles. "They
were lined up," says Winterble. Mostly, the
presenters just let Fred Bowen's demonstration
program show off the features. "It was really
impressive for only having the machine in his
hands for a short period of time," says Winterble.
"He wrote a 'Welcome to Commodore 64,' that
came out with a big splash. Then this little man
walked across the screen, turned around, and started
doing things. It was a great little demo using
As Robert Russell recalls, the burgeoning computer
press industry helped fuel interest. "There
was starting to be a whole press industry around
personal computing," says Russell. As word
got out about the new computer, the lines to enter
the booth grew longer. "It was a huge sensation.
Everybody and their brother were stopping by."
Yannes was also thrilled at the positive reception
of his computer. "The C64 just kind of blew
everybody out of the water because it came out
of nowhere," says Yannes. "There was
no expectation of it, it was very reasonably priced,
and it had 64K of RAM which was a magic number
at that point in time because nobody else had
64K of RAM."
The computer even impressed Chuck Peddle, who
never missed a CES show. "The C64 was an
enormously successful machine," says Peddle.
"It was a great game machine; not because
of the 6502 and not because of the memory that
was in it. It was a great game machine because
of the work Charpentier did."
Perhaps the most impressive aspect of the computer
was the proposed price by Commodore. Before the
show, Jack decided on a retail price of $595.
Competitors reacted to the announcement with skepticism
and shock. "We got their attention,"
says Winterble. "The guys from Atari came
by to look at it and said, 'They can't do that.
It's impossible for the price.'" From the
reactions, Charles Winterble felt the new computer
might even outsell the VIC-20. "When we left
CES, we knew we had a fantastic product,"
It was an incredible leap in computing power
from their previous efforts. Never before had
a computer company gotten everything so right
in one package. "It was such a big hit at
the show," says Yannes. Press was good but
not as prominent as Commodore received in earlier
years. David Thornburg of Compute! magazine mentioned
the VIC-40, reporting, "For sheer impact,
Commodore stole the show with the announcement
of two new color computers!" However, Byte
magazine reported nothing on Commodore. By now,
Commodore had a reputation of announcing products
such as the ColorPET and TOI and not releasing
them, so Byte was weary. Byte seemed far more
interested in the low cost VIC modem, which made
its debut at the Winter CES.
The meaning of the Commodore 64 debut was obvious
to Jack: he finally had his Apple II killer. Now
all he had to do was deliver the crushing blow.
He wanted to get the machine into production quickly.
After CES, Jack wanted the Commodore 64 sent to
the assembly lines. Unfortunately, the prototypes
could not be mass-produced. "We weren't ready
to go into production," says Winterble. "After
the show, we had a great deal of work to do to
really turn it into a production product."
Although the MOS Technology engineers had no experience
in production engineering, it would be up to them
to design a production model in record time. "We
wanted to be in production in three months,"
To launch the product, the marketing team also
had plenty of work to do, since they were unaware
of the project until CES. "It wasn't even
handed to marketing until after that show,"
says Russell. Winterble suspected there would
be some resentment within Commodore due to the
secrecy of the project. "Commodore was a
company that had friction a lot of times,"
explains Winterble. "One of the big friction
areas was between marketing and engineering. There
was a long standing... animosity is probably too
strong of a word, but marketing and engineering
at Commodore did not get along. And from our point
of view, why did we care?" Michael Tomczyk,
like most marketing people, still clung to the
success of the VIC-20. "Tomczyk was fighting
the C64," reveals Peddle. "I've written
him a note two or three times saying, 'I don't
know why you did that at the time.' The VIC-20
did exactly what it was supposed to do, which
is to pave the way for the C64."
Part of the animosity was probably due to the
favored position of the engineers in Jack's eyes,
and the powerlessness of marketing to influence
engineering. "The engineering side had an
easier life because everybody is an expert in
marketing, but if you're going to be an expert
in engineering you have to know the technology,"
says Winterble. Kit Spencer wanted the engineers
to modify the C64. "When we met with the
marketing people and went through it all, there
were a number of issues that they wanted to change
right away," says Winterble. Spencer raised
some legitimate issues with the Commodore 64.
First, the operating system was horribly antiquated.
It was no different from the PET released almost
five years earlier. Second, the computer had no
backward compatibility with VIC-20 software. The
VIC-20 was a huge market and Spencer did not want
to lose the established software base. Third,
the Basic language had no support for sprites,
sounds, or graphics. This forced programmers to
use difficult POKE statements. Winterble opposed
Spencer on every change. "One of my jobs
was to fight the battles," says Winterble.
"I had relatively strong opinions about things
and I was willing to fight."
Spencer recognized the importance of DOS to the
new IBM PC computers. He wanted Commodore computers
to have the same high-level operating system,
so he tried to push the engineers into adopting
the CP/M operating system. CP/M was an important
and popular operating system at the time with
hundreds of business related applications. One
of the key features of CP/M was the ability to
create directories. Without them, disks with more
than one program often contained a disorganized
jumble of files.
To allow an alternate operating system like CP/M
to load automatically, the engineers would have
had to include a feature to load a program from
disk as soon as the user turned on the computer.
"All the routines that need to be there are
there, but there should also be a facility for
automatically reading the first track of the disk
and booting a more sophisticated operating system
into memory," says software developer Brian
Dougherty, who later created the GEOS operating
system. (IEEE Spectrum journal, "Design case
history: the Commodore 64", (March 1985),
Winterble disagreed with Spencer over CP/M. "One
of the battles that came up was CP/M," says
Winterble. "They were pushing for, 'We've
got to have a computer that will run CP/M.'"
Winterble felt the CP/M operating system was not
worth including. As a compromise, the engineers
developed a CP/M cartridge using the Z80 microprocessor.
"We designed it right from the beginning
[of the production design] to take a Z80 module,"
says Russell. Since the engineers believed the
computer would use CP/M, Russell made no effort
to improve the native operating system. Memory
limitations also prevented the Commodore 64 from
using the new Basic 4.0, intended for the P and
B computers. "Why did we have [Basic 2.0]?
That's how much room the ROM could fit,"
Time was the overriding factor for Russell and
the engineers. "We were trying to get it
out the door," he says. "We could see
the computers coming that had better Basic and
real operating systems but we wanted to do the
simplest, most straight forward, cheapest and
quickest system possible." Yannes acknowledges
Basic 2.0 was antiquated by 1982. "It was
a very primitive Basic," he recalls. "It
had no graphics expansions or sound extensions
or anything." Basic 2.0 was the antithesis
of user friendly. To delete a file, the user had
to type: OPEN 15,8,15:PRINT#15,"S0:filename":CLOSE15.
In contrast, Basic 4.0 users merely typed: SCRATCH
Another quirk of the Commodore Basic operating
system was the memory designation. Commodore engineers
chose to identify the size of files and disk space
using blocks as opposed to bytes or kilobytes.
Few users understood what a block was. They knew
their computer had 64 kilobytes, but it was hard
to say how much memory each program occupied on
disk. Spencer appealed to Jack, but he was unsupportive.
"Jack didn't care what kind of software his
machines had," says Yannes. "He was
putting the same Basic in every machine, even
though it was obsolete and had very few features."
Jack had no concept of how crucial the operating
system was to the success of a computer. His views
were rooted in mechanical devices like typewriters
and calculators, so he placed an emphasis on hardware.
In effect, he had a blind spot when it came to
the invisible software in the ROM chips. "Commodore
was an extension of Jack Tramiel, and to him software
wasn't tangible," says Charpentier. "You
couldn't hold it, feel it, or touch it, so it
wasn't worth spending money for." The extra
ROM chip would have added approximately three
dollars to the cost of the Commodore 64 in 1982.
Though this was by no means a small amount to
add to the cost, it would have improved the system
Spencer also lobbied for backward compatibility
with VIC-20 software. Backward compatibility was
on the drawing board ever since John Feagans implemented
the kernel. Now that Commodore was designing their
next computer, they had the option of following
Feagans plan and making their next computer backward
compatible. However, Russell had an insurmountable
obstacle preventing him from achieving backward
compatibility. The VIC-II video chip was not capable
of displaying the same resolutions as the original
VIC-I chip. As a result, it could not display
22 characters per line. Without this native capability,
there was no point in even attempting backward
compatibility. Robert Russell remembers discussing
backward compatibility in the VIC-II chip. "We
wanted a compatibility mode, but that would have
taken up too much of the chip," he explains.
"We would rather have sprites than compatibility
Winterble also took part in the discussions.
"Al originally had compatibility built into
the chip, but realistically you are talking two
totally different machines," he says. "When
you are that price sensitive, every penny counts.
You really don't want to put a lot of hardware
in there for backward compatibility. It's better
to rewrite the software and use the new features."
(Al Charpentier does not recall considering a
VIC-I mode for the VIC-II chip.) Spencer also
found little support from Jack Tramiel. "He
couldn't care less if anything was compatible
at that point in time," says Russell. "When
you would talk to Jack, he was like, 'Don't worry
about compatibility. We'll sell them a new computer
for cheap, so who cares about compatibility.'
As far as we were concerned, if it ran Basic it
was compatible." In the end, Spencer had
no option but to defer to Jack's decision. "The
marketing people obviously really wanted backward
compatibility because that was big to them,"
says Russell. "Kit was definitely marketing
at that point in time. We got beat up [by Spencer]
but Jack silenced them when he said he didn't
care about compatibility. The engineers won that
One of the biggest omissions from Basic was the
lack of programming commands for sound and graphics.
Under the original Microsoft deal, Commodore could
have added commands to Basic for the SID and VIC-II
chip but they chose not to because of Jack's reluctance
to invest in software. As a result, Basic programmers
found themselves faced with complicated POKE and
PEEK commands, which required a comprehensive
knowledge of memory locations. This dampened the
enthusiasm of many beginners who hoped to homebrew
Basic games. The extra commands would have required
costlier ROM chips. "It would have been quite
a bit more money because there would have been
a second chip," says Russell. "At that
time, our process only allowed us to make a certain
sized chip." Winterble blames the lack of
manpower on the lack of features. "We talked
about putting in macros and the ability to do
some of these things, but we just didn't have
the resources to do it," says Winterble.
"We didn't have the people. It was such a
small software group. The idea was we would try
to go back and do some of that stuff later on."
Commodore later released a special cartridge with
more commands, but it found little success in
the marketplace. "The Super Expander cartridge
added a bunch of extensions to Basic to let you
access the features of the Commodore 64,"
With the limited ROM space, Russell barely had
room to insert his own initials. "In those
days we didn't even dream of putting in Easter
eggs because in the C64 I had 5 bytes left when
I was done," says Russell. "I was going
to put in, 'BYRSR', but Bob Yannes but didn't
think that was a good idea so we just put RRBY
Winterble began to feel annoyed when the marketing
people went straight to his engineers to request
features in the VIC-40. "We had things like
the marketing guys trying to call the engineers
directly and lobby for changes," he says.
The relationship between Winterble and Spencer
continued to deteriorate until the two had an
explosive argument. "I remember one time
we bumped heads," says Winterble, who was
growing tired of marketing people disturbing his
engineers. "I tried to keep the guys isolated
so they could do their job." In one heated
exchange, Winterble chided Spencer, saying, "You
don't talk to these guys. Leave them alone."
After that, the engineers were free to complete
the design without interference.
Although the Commodore 64 was not truly software
compatible, Commodore paid lip service to backward
compatibility. Their marketers promoted limited
backwards compatibility, meaning VIC-20 hardware
like joysticks, modems, disk drives, and printers
would still work on the C64. Additionally, the
Basic 2.0 ROM meant very simple Basic programs
that did not use POKE commands would technically
run on both systems. Commodore hoped the ambiguous
statement might entice VIC-20 users to buy the
new C64. It was probably wise to drop backward
compatibility, given the limitations of the VIC-20.
Unfortunately, it seemed to set the pattern for
Delay of Game
Jack expected his engineers to complete their
design in three months, but by the end of March,
it became clear the target was overly optimistic.
Bob Yannes blames the unrealistic goal on the
seemingly refined state of the Commodore 64 at
CES. "After the CES show everyone was thinking
that it was a real product because it looked real,
because we used the VIC-20 case and just painted
it," says Yannes. "It looked like it
was ready to go into production." If Commodore
had more engineers, they would have been able
to divide the tasks. "I think maybe there
were 10 or 12 engineers in the whole company that
were true engineers, including software, hardware,
and chip design," says Russell. "Including
people in Japan, the total number of engineers
in the company was 15 when the Commodore 64 was
Most of the engineers were working on other diverse
projects for Commodore. "That includes people
working on the PET, and a couple of guys down
in Texas doing the whole cash register business,"
says Russell. "They ended up with us on the
C64 in later days, because they were some of the
few resources that existed within the company."
One of the most obvious changes made to the Commodore
64 post-CES was the screen color. "Even though
it had good contrast, the transition from blue
to white produced kind of an ugly edge,"
explains Yannes. "We ended up having to make
it light blue on dark blue so the color didn't
change. Just the intensity changed."
Now that the final design was underway, the determination
to meet a low cost target grew stronger. Charpentier
says, "We agonized over every transistor."
For his part, Winterble vetoed ideas for added
features. Although the case would become as distinctive
and loved as the Volkswagen Beetle, Charpentier
himself was never a big fan. "I always thought
the VIC-20 case looked clunky," he says.
Winterble also had his own reasons for disliking
the case. "If we had made the case bigger
to begin with, we would have made the design much
more manufacturable," he says. "It was
hell for those poor guys in manufacturing. We
squeezed things to the limit to fit all this crap
on the board. This was a product that was manufacturing
hostile." Yannes had plans to substitute
the case with a new design in eight to ten months.
"We always wanted to design a new case for
the Commodore 64," says Yannes. "It
was never our intention that it would go into
production with the VIC-20 type case. I would
have liked to have seen much better styling on
the case." Charpentier describes the proposed
design. "It was thinner in front and had
more of a wedge shape to it," he says. (Many
years later, Commodore adopted this design in
the revised Commodore 64c.)
The production design seemed to be going smoothly
until the engineers decided to try to improve
the video chip. "We took the time to make
a design change in the video chip, which I think
both Al and Charlie would agree that we probably
shouldn't have done," says Yannes. The engineers
wanted to improve the color on the chip. "It
was the same thing with the Apple and Atari computers,"
explains Yannes. "You would get interaction
between the luminance signal, which is the black
and white information, and the color signal. So
you would end up with these various colors on
the screen that weren't really what you wanted,
but it was just the nature of the NTSC video standard
that the luminance and chrominance signals interact
with each other." To purify the colors, Charpentier
made a risky last minute change. "Al had
the idea that if the two clocks were independent
from each other then that interaction wouldn't
happen," says Yannes. "We separated
the clock generators on the VIC chip so that the
color crystal was a separate clock from the video
The results were impressive but flawed. "We
didn't get the false colors anymore, but unfortunately
because the two clocks weren't phase synchronized
at all, so there was this waviness in the screen
which was really objectionable," says Yannes.
The engineers required a Texas Instruments chip
to fix the problem. "We ended up having to
throw in this phase-lock loop circuit to lock
the two clocks together, which added cost to it."
According to Yannes, Jack was not happy using
the extra chip. "It was particularly messy
because the only [company] who made this chip
was Texas Instruments, and we were going up against
their Ti-99/4A computer with the Commodore 64,"
says Yannes. "So here we are dependant on
one of our major competitors for a critical component."
Commodore regained control over their chip supply
by using MOS Technology to clone their competitor's
When the production design was completed, the
total cost to manufacture one unit came out to
$130. Even Jack must have been impressed. His
strategy of setting unrealistic goals for his
engineers paid off.
"The reason we could is because of vertical
integration," says Winterble. "We put
so much in just a couple of chips." Without
vertical integration, the custom SID and VIC-II
chips would account for a much more significant
portion of the costs. Atari and Apple lacked the
in-house expertise to manufacture their own custom
chips, which meant they had to hire costly outside
companies (often MOS Technology) to come up with
designs. As a result, Apple and Atari computers
were both costlier and not as technologically
The low production cost meant Commodore could
sell their computer for under $600. "You
could basically take the suggested retail price
and divide by four," explains Yannes. "The
typical thing to do was for you to have a raw
cost, then double it to sell it to the dealer,
and then have the dealer double it to sell to
the consumer. That was the model."
In June 1982, the production design was completed
enough to send to production. "It took us
six months, and we all got crap over that,"
Falling Behind Moore's
Moore's Law, created by Intel's cofounder Gordon
Moore in 1965, predicts the number of transistors
per square inch doubles every 18 months. This
results in massive gains in computing speed proportional
to the number of transistors. A less known feature
of this law is that the price of computing power
halves every 18 months. While Commodore and their
customers were reaping the benefits of cheap products,
MOS Technology was failing to keep pace with Moore's
The main processor for the C64 was not a 6502,
but rather the newly minted 6510. This chip was
a minor revision over the 6502. Today, we measure
the advance of computer technology by the speed
of computing, but the microprocessor at the heart
of the C64 was no faster than the VIC-20, the
PET, or even the Kim-1 released in 1975. In fact,
the C64 was imperceptibly slower than the VIC-20.
Although MOS Technology was very competitive
with Motorola and Intel with the 6502, they were
weak in the key area of microprocessor research.
Engineer Bill Mensch attempted to develop a 16-bit
sequel to the 6502. "When it came to next-generation,
we were thinking 16-bit in 1976," says Mensch.
(Compute! magazine, "New Life For The 6502?"
(February 1986), p. 26.) Robert Russell discovered
evidence of the 16-bit project developed in partnership
with Synertek. "I found a September 1978
description of the SY6516, which was a 16-bit
6502," says Russell. "Synertek was the
company that was supposed to be designing it.
I have a specification sheet on it with timing
and temperature settings. Reading this, it looks
absolutely real." Unfortunately, Synertek
became a victim of the competitive semiconductor
industry. "I think Synertek got into financial
problems right around that point in time,"
says Russell. "There were some rough years."
MOS Technology's financial problems hampered
development of a 16-bit version before the Commodore
acquisition. "Nothing happened for the longest
time," says Winterble. "I think part
of it was the financial resources of MOS Technology.
They just simply couldn't afford it. I have no
doubt that if they had the resources they would
have done a spectacular job because the 6502 was
a phenomenal architecture." The 16-bit project
eventually faded away at MOS Technology. "It
just never got any kind of support in the organization,"
says Charpentier. "To be in the microprocessor
business, you have to sell microprocessors into
the OEM market. Commodore had never developed
an OEM semiconductor market. They were a systems
house that developed computers with it. It just
wasn't a focus in the company." After Mensch
developed a calculator chip for MOS Technology,
he wanted to produce a special low-power 6502
chip. However, MOS Technology turned him down,
so Mensch approached other companies such as Rockwell,
GTE, Synertek, and Mitel but they rejected his
Mensch designed the processor anyway. Charles
Winterble believes many of the features developed
at MOS Technology went into Mensch's chips. "A
lot of the ideas that were in that went down to
the Western Design Center probably because it
was the same people," he says. Mensch wanted
to design a CMOS 6502 chip. The CMOS process was
more efficient than the outdated NMOS process.
The NMOS process, or N-Channel Metal Oxide Semiconductor,
required 13 layers to form a chip. CMOS, which
stood for Complimentary Metal Oxide Semiconductor,
used only six layers. CMOS also used less current,
and it was faster.
In early 1981, Mensch began designing the low-power
6502 chip using CMOS technology. "Ultimately,
they came out with a CMOS version of the 6502,"
says Peddle. Mensch called his new chip the 65C02.
Mensch went back to the companies that previously
rejected him and offered to license the technology.
GTE, Synertek and Rockwell purchased a license,
but Commodore decided instead to sue for theft
of trade secrets since the 65C02 used the same
instruction set as the MOS owned 6502 design.
Mensch settled out of court and agreed to grant
rights to the 65C02 at half the standard license
fee. Jack relished the deal. Without the knowledge
and experience of Peddle and Mensch, MOS continued
to fall below the expectations of Moore's law.
While other companies like Intel and Motorola
were making strides with 16-bit and 32-bit processors,
MOS focused on custom semiconductor chips like
the VIC and SID.
In 1982, MOS Technology began working on a 16-bit
processor once again. "There was a 16-bit
6502 program," reveals Charpentier. In August
1982, Byte printed rumors that Commodore had working
prototypes of their new family of 16 and 32-bit
microprocessors. Then in November 1982, they began
calling the new chip the 65000. The article even
speculated Commodore would use initial production
runs of the processor in a new computer of their
own. "We tried to do the same thing at MOS
with a few people there," says Winterble.
"We didn't start until '82 or so. Probably
as they started working on it they let it leak
out for publicity sake." Leading the design
of the chip was one of Chuck Peddle's engineers.
"It was Will Mathis," says Charpentier.
"He was part of the original  team."
Although Winterble was the head-engineering manager
of MOS Technology, he had little enthusiasm for
the project. "It was at a difficult time,
now that the C64 was done," says Winterble.
"We hired back the architect who did the
original 6502, who was local up there, and we
brought in a couple of other guys and Weeewe put
together a team to do that. But about then was
when Al and I were less enthusiastic, and we started
thinking about where our future's going to be."
Winterble felt the team should keep the 16-bit
6502 as simple as possible. "We allowed the
creative people to go ahead and do their free-wheel
thinking about fancy new architectures and stuff
like that," says Winterble. "[They discussed]
different approaches to doing a processor. I was
not in favor of this too much. I just wanted to
do essentially the same thing [as the 6502], but
just 16-bit. Then the issue became, well why bother
According to Winterble, the project team lost
focus soon after forming. "It got to the
point where they were doing some layouts, but
the guys who were doing the architecture were
sort of undisciplined people," he explains.
"After a certain point it became, 'This is
not going to fly.'" Normally, if Jack pushed
for a product, his engineers became highly motivated
and completed the product. However, Jack seemed
indifferent to a 16-bit processor. "There
was no push at all," says Winterble. "We
weren't getting anywhere and it never really got
going." The lack of a 16-bit processor severely
hurt Commodore's chances of remaining competitive
in the future of computing.
Although Commodore ran their computers at 1 MHz,
Charles Winterble claims they were able to achieve
faster speeds with the 6502. "We thinned
the oxides down and we intentionally did some
very high speed versions of that," says Winterble.
"One thing MOS [Technology] had going for
it was a really good quality oxide. By thinning
these gates down, we were able to drive it faster
and faster. Then we did selection, in terms of
our testing, to pull out the fast ones. We actually
made a couple of really hot processors for a chess
tournament for somebody. He literally water-cooled
it, and he ran it at something like 8 MHz. It
was just ridiculous how fast he ran it."
Even though MOS Technology could theoretically
produce faster chips, Bob Yannes claims they could
not use them in the Commodore 64 because of RAM
memory limitations. "That would never have
worked," he states. "The speeds we had
to operate at had to be a multiple of the video
rate. The RAM timing wouldn't hold up at that.
With the video and the processor alternating on
the bus, you're basically running the memory at
twice as fast as it would normally be run."
In addition, the costs of producing parts for
a 2 MHz Commodore 64 would drastically raise the
price to customers. "The other problem is
that the cost goes up exponentially because not
only does the processor have to run faster, but
the RAM and the ROM have to run faster,"
explains Winterble. "It isn't even linear;
it's exponential. It would be too expensive."
Surprisingly, the lack of microprocessor speed
did not immediately hurt the Commodore 64. In
1982, consumers were generally not aware of processor
speed since most were taking their first steps
in the computer world. To them, it was much more
valuable to be cheap than fast.
Purchase the book
You have just been able to read two full chapter
in this amazing book on Commodore. If you're interested
in reading the rest, purchase the book at www.commodorebook.com. These chapters were re-printed with permission
from author Brian Bagnall. Thanks a lot pal!
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