VU Meter with Dot/Bar display driver
The chip is nothing more than a chip that takes in audio, and compares the audio amplitude with 10 internally generated reference voltages, and these reference voltages are logarithmically spaced to provide a decibel output. Each of the comparator turns on a LED if the audio signal exceeds the reference voltage.
In reality the chip has quite a lot of features, such as dot mode or bar graph mode can be selected.
The LEDs are just set on or off based on voltage, so the color is up to the chosen LED that is being lit.