Motorola 6800 - Design Team Breakup

Design Team Breakup

The principal design effort on the M6800 family was complete in mid 1974 and many engineers left the group or the company. Several factors led to the break-up of the design group.

Motorola had opened a new MOS semiconductor facility in Austin Texas and entire engineer team was scheduled to relocate there in 1975. Many of the employees liked living in the Phoenix suburb of Mesa and were very wary about moving to Austin. The team leaders were unsuccessful with their pleas to senior management on deferring the move.

A recession hit the semiconductor industry in mid 1974 resulting in thousands of layoffs. A November 1974 issue of Electronics magazine reports that Motorola had laid off 4,500 employees, Texas Instruments 7,000 and Signetics 4,000. Motorola's Semiconductor Products Division would lose $30 million dollars in the next 12 months and there were rumors that the IC group would be sold off. Motorola did not sell the division but they did change the management and organization. By the end of 1974 Intel fired almost a third of its 3,500 employees. The MOS IC business rebounded but job security was not taken for granted in 1974 and 1975.

Chuck Peddle (and other Motorola engineers) had been visiting customers to explain the benefits of microprocessors. Both Intel and Motorola had initially set the price of a single microprocessor at $360. Many customers were hesitant to adopt this new microprocessor technology with such a high price tag. (The actual price for production quantities was much lower.) In mid 1974 Peddle proposed a simplified microprocessor that could be sold at a much lower price. Motorola's "total product family" strategy did not focus on the price of MPU but on reducing the customer's total design cost. Their immediate goal was to get their completed system into production and they would work on improvements in 1975.

Peddle continued working for Motorola while looking for investors for his new microprocessor concept. In August 1974 Chuck Peddle left Motorola and joined a small semiconductor company in Pennsylvania, MOS Technology. He was followed by seven other Motorola engineers: Harry Bawcum, Ray Hirt, Terry Holdt, Mike James, Will Mathis, Bill Mensch and Rod Orgill. Peddle's group at MOS Technology developed two new microprocessors that were compatible with the Motorola peripheral chips like the 6820 PIA. Rod Orgill designed the MSC6501 processor that would plug into a MC6800 socket and Bill Mensch did the MSC6502 that had the clock generation circuit on chip. These microprocessors would not run 6800 programs because they had a different architecture and instruction set. The major goal was a microprocessor that would sell for under $25. This would be done by removing non-essential features to reduce the chip size. An 8-bit stack pointer was used instead of a 16-bit one. The second accumulator was omitted. The address buffers did not have a three-state mode for Direct Memory Access (DMA) data transfers. The goal was to get the chip size down to 153 mils x 168 mils (3.9 mm x 4.3 mm).

Chuck Peddle was a very effective spokesman and the MOS Technology microprocessors were extensively covered in the trade press. One of the earliest was a full-page story on the MCS6501 and MCS6502 microprocessors in the July 24, 1975 issue of Electronics magazine. Stories also ran in EE Times (August 24, 1975), EDN (September 20, 1975), Electronic News (November 3, 1975) and Byte (November 1975). Advertisements for the 6501 appeared in several publications the first week of August 1975. The 6501 would be for sale at the WESCON tradeshow in San Francisco, September 16–19 1975, for $25 each. In September 1975 the advertisements included both the 6501 and the 6502 microprocessors. The 6502 would only cost $20.

Motorola responded to MOS Technology's $20 microprocessor by immediately reducing the single unit price of the 6800 microprocessor from $175 to $69 and then suing MOS Technology in November 1975. Motorola claimed that the eight former Motorola engineers used technical information developed at Motorola in the design of the 6501 and 6502 microprocessors. MOS Technology's other business, calculator chips, was declining due to a price war with Texas Instruments so their financial backer, Allen-Bradley, decided to limit the possible losses and sold the assets of MOS Technology back to the founders. The lawsuit was settled in April 1976 with MOS Technology dropping the 6501 chip that would plug into a Motorola 6800 socket and licensing Motorola's peripheral chips. Motorola reduced the single unit price of the 6800 to $35.

The MOS Technology vs. Motorola lawsuit has developed a David and Goliath narrative over the years. One point was the Motorola did not have patents on the technology. This was technically true when the lawsuit was filed in late 1975. On October 30, 1974, before the 6800 was released, Motorola filed numerous patents applications on the microprocessor family and was granted over twenty patents. The first was to Tom Bennett on June 8, 1976 for the 6800 internal address bus. The second was to Bill Mensch on July 6, 1976 for the 6820 chip layout. Many of these patents named several of the departing engineers as co-inventors. These patents covered the 6800 bus and how the peripheral chips interfaced with the microprocessor.

(Intel had a similar incident. Federico Faggin, who had led the development of the Intel's first microprocessor, the 4004, and it latest, the 8080, grew restless under the management changes at Intel. Faggin and another Intel engineer, Ralph Ungermann, began talking about starting up their own microprocessor company. Faggin and Ungermann left Intel and started Zilog in November 1974. Masatoshi Shima, the designer of the Intel 8080, joined Zilog in February 1975 and they obtained funding from Exxon's venture capital group in June 1975. Zilog decided to make a superset of the Intel 8080 that also incorporated features from the 6800 and others. The Z80 only required a single 5 volt power supply and a single phase clock input. It was the first microprocessor to offer built-in support for dynamic RAM.)