The paper first introduces the new concept of potential diversity and signal decomposability, which establish a foundaton to generalize the existing concepts of path and frequency diversities. Then it presents a new DS/CDMA system called chip-spreading OCDM system, which is an embodiment of the petential diversity concept that combines the path diversity of the DS/CDMA system and the frequency diversity of the OFDM/CDMA system. In the chip-spreading OCDM system the chip sequences in each symbol interval are first converted into aralled streams, which then simultaneously modulate different orthogonal Walsh basis functions. In the receiver, the received signal is matched to each extended basis-function which is the union of the transmitter basis-functions and their delayed replicas, and the matched-filtered chip samples are combined together after individual channel compensation. The conventional DS/CDMA system using the maximal ratio combining. In addition, it effectively resolves the high PAR and high sensitivity to frequency offset problems which are critical in multi-carrier systems.