Three former General Instrument executives, John Paivinen, Mort Jaffe and Don McLaughlin, formed MOS Technology in Valley Forge, Pennsylvania in 1969.

Although the 6501 instruction set was not compatible with the 6800, it could nevertheless be plugged into existing motherboard designs because it had the same functional pin arrangement and IC package footprint.

Allen-Bradley sold back its shares to the founders, sales of the 6501 basically stopped, and the lawsuit would drag on for many years before MOS was eventually forced to pay US$200,000 in fines.

It was nearly identical to the 6501, with only a few minor differences: an added on-chip clock oscillator, a different functional pinout arrangement, generation of the SYNC signal (supporting single-instruction stepping), and removal of data bus enablement control signals (DBE and BA, with the former directly connected to the phase 2 clock instead).

They were not aware of MOS's masking techniques and when they calculated the price per chip at the current industry yield rates, it did not add up.

A number of companies licensed the 650x line from MOS, including Rockwell International, GTE, Synertek, and Western Design Center (WDC).

At about the same time the 6502 was being released, MOS's entire calculator IC market collapsed, and its prior existing products stopped shipping.

A fresh injection of capital saved CBM, and allowed it to invest in company suppliers in order to help ensure their IC supply would not be upset in this fashion again.

Holders of MOS received a 9.4 percent equity stake in CBM[3][4][5] on the condition that Chuck Peddle would join Commodore as chief engineer.

The deal went through, and while the firm basically became Commodore's production arm, they continued using the name MOS for some time so that manuals would not have to be reprinted.

At Commodore, Peddle convinced the owner, Jack Tramiel, that calculators were a dead end, and that home computers would soon be huge.

However, the original design group appeared to be even less interested in working for Jack Tramiel than it had for Motorola, and the team quickly started breaking up.

After a short stint consulting for a local company called ICE, he set up the Western Design Center (WDC) in 1978.

As a licensee of the 6502 line, their first products were bug-fixed, power-efficient CMOS versions of the 6502 (the 65C02, both as a separate chip and embedded inside a microcontroller called the 65C150).

Since then WDC moved much of the original MOS catalog to CMOS, and the 6502 continued to be a popular CPU for the embedded systems market, like medical equipment and car dashboard controllers.

In December 1994, the EPA entered into a Prospective Purchase Agreement (limiting the company's liability in exchange for sharing the costs of cleanup) with GMT Microelectronics.

[8][9] This was due to a 1978 leak of trichloroethylene (TCE) from an underground 250-gallon concrete storage tank used by Commodore Business Machines in the semiconductor cleaning process.