3dfx has announced it will quit the graphics-card manufacturing business.

3dfx recently announced its official support for the Mac, with the release of the Voodoo5 5500 PCI and AGP cards, and its recently-released Voodoo 4500 card. It's products have won many converts in the Mac market, developers praise its support, and gamers praise the quality of its 3D rendering.

The company will continue to develop graphics-chip technology, but intends licensing it. 3dfx says it will "outsource its board manufacturing to third-party manufacturers".

Mexi-go 3dfx is to sell its factory in Mexico, and is to focus its marketing on selling graphics chips to other 3D graphics-card makers, according to CNN.

Alex Leupp, 3dfx's president and chief executive officer, said: "As we expand into new markets, 3dfx must focus on its core competency - developing leading-edge graphics technology. The sale of our Mexican facility will allow us to continue selling add-in-board products to the retail channel, with significantly reduced fixed costs.

"We also plan to pursue additional retail partnerships to ensure we get our high-performance graphics technology in the hands of our loyal customers."

The company has seen its share price drop over the last year in reaction to a series of obstacles – including the late delivery of its' next-generation VSA-100 chip, production difficulties and competition from Nvidia and ATI.

Scott Sellers, 3dfx's chief technology officer, said: "We believe that to license our graphics core to the primary players in the integrated-chip-set market is the right strategy. This could gain 3dfx access to over 90 per cent of the graphics market without the overhead associated with chip production and inventory."