MOS Technology, Inc was a microprocessor manufacturing company founded by entrepreneurs leaving the Allen-Bradley company, most famous for its creation of the ubiquitous 6502 processor. It was acquired by Commodore International in September of 1976, and was brought into Commodore's umbrella subdivision Commodore Semiconductor Group (CSG). 
The 6502 Processor
The 6502 was used as the main CPU (Central Processing Unit) in many computers and game consoles during the late 1970s and early-to-mid-1980s. An incomplete list of machines that were built around the 6502 include:
"In 1969, a large industrial manufacturing company named Allen-Bradley wanted to enter the new semiconductor business. They financed the creation of MOS Technology." The founders selected had also previously worked with Chuck Peddle at General Electric, and their names were Mort Jaffe, Don McLaughlin and John Pavinen.
The company's original target market and purpose was to provide a second source for Texas Instruments designed electronic calculators and the chips inside them.
Fortunes for and the direction of the company changed dramatically in 1975. A group of designers from the Motorola 6800 team left the company in a mass exodus shortly after its release. "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 and Terry Holt." MOS was a small firm with good credentials in the right area, Valley Forge, PA, and this was the luckiest windfall the company had yet received.
At MOS the team set about building a new CPU that would outperform the 6800 while being similar to it in purpose. The resulting 6501 design was somewhat similar to the 6800, but by using inovations in the design (such as pipelining), the 6501 would be up to four times faster.
When the 6501 was released, Motorola filed suit against MOS almost immediately. The 6501 was pin compatible with Motorola's 6800 (meaning it could fit in the same board socket), however its instruction set was different. "It was definitely not a clone," says Peddle. "Architecturally it's a 6502. The only difference is it plugs into the Motorola socket."
Nevertheless, MOS Technology changed the processor's design to avoid being sued. The 'lawsuit-friendly' 6502 (which was neither pin-compatible nor instruction-set compatible) was the result.
Acquisition by Commodore
In a strategic move spearheaded by Jack Tramiel Commodore International acquired MOS Technology in September of 1976. The book 'On the Edge' concludes that the reasoning behind this move was to allow Commodore complete vertical integration of its products.
Everything needed for a computer, to include its processor, could be designed and built by Commodore, instead of paying a so-called middle man such as Intel or Motorola to produce the processor. This would also remove the dependency Commodore had on its rivals to innovate. Instead of waiting for the "latest, greatest" processor from such mentioned companies, Commodore could innovate in-house.
- Brian Bagnall. 'On the Edge: The Spectacular Rise and Fall of Commodore'. ISBN 0-9738649-0-7. Cite error: Invalid
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