from
The Free On-line Dictionary of Computing (8 July 2008)
Chadless keypunch
<hardware> A {card punch} which cut little U-shapes in
{punched cards}, rather than punching out a circle or
rectangle. The U's made a hole when folded back.
One of the {Jargon File}'s correspondents believed that the
term "chad" derived from the {Chadless keypunch}. Obviously,
if the Chadless keypunch didn't make them, then the stuff that
other keypunches made had to be "{chad}". The assertion that
the keypunch was named after its inventor is not supported by
any record in US or UK patents or surname references.
(2000-11-22)