Hi,
Yes that is correct. The first chip, if blanking, not only blanks that digit but also
sends out a blanking signal that can be fed into the input of the next chip in the
line so that it too will blank a zero, and also that chip will output to the next
chip and so on and so forth. This handoff from chip to chip is called 'ripple'.
If any chip does not get a zero logic combination to it's inputs it does not output
a ripple blanking signal and so the blanking stops there. This action prevents
the blanking of zeros that are really supposed to be displayed.
For example, for the number 4012 on an eight digit display would attempt to
display "00004012", but with ripple blanking activated on the first (leftmost)
chip (digit) the first digit blanks, then the second, then the third, and then the
fourth, but since the fifth digit is a '4' that does not output a ripple blanking
signal so the zero after the '4' does not get blanked, so now the display instead
shows up as: "____4012" (the underlining shows digits that are dimmed out so
they dont show the zeros).
This is a feature that helps improve the readability of the display especially when it
is used for a calculator or something like that.
While we are on the subject, another display feature is to light up the upper display
segment for the number '6'. Some display chips display a 6 that looks something like
a lower case 'b' (second letter in the English alphabet) but others include lighting
the top segment (i think it is the 'f' segment). This improves the readability
slightly too and looks nicer as well.