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Due to its high image quality and moderate computational complexity, error diffusion is a popular halftoning algorithm for use with inkjet printers. However, error diffusion is an inherently serial algorithm that requires buffering a full row of accumulated diffused error (ADE) samples. For the best performance when the algorithm is implemented in hardware, the ADE data should be stored on the chip on which the error diffusion algorithm is implemented. However, this may result in an unacceptable hardware cost. In this paper, we examine the use of quantization of the ADE to reduce the amount of data that must be stored. We consider both uniform and nonuniform quantizers. For the nonuniform quantizers, we build on the concept of tone-dependency in error diffusion, by proposing several novel feature-dependent quantizers that yield improved image quality at a given bit rate, compared to memoryless quantizers. The optimal design of these quantizers is coupled with the design of the tone-dependent parameters associated with error diffusion. This is done via a combination of the classical Lloyd-Max algorithm and the training framework for tone-dependent error diffusion. Our results show that 4-bit uniform quantization of the ADE yields the same halftone quality as error diffusion without quantization of the ADE. At rates that vary from 2 to 3 bits per pixel, depending on the selectivity of the feature on which the quantizer depends, the feature-dependent quantizers achieve essentially the same quality as 4-bit uniform quantization.