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Previous work has shown that sizable power reductions can be achieved by shutting down a system's sub-circuits when they are not needed. However, these shutdown techniques focus on shutting down only portions of the controller or the datapath of a single custom hardware processor. We propose a higher level shutdown technique that considers both the controller and datapath simultaneously; in particular, we partition a processor into multiple simpler mutually-exclusive communicating processors, and then shut down the inactive processors (i.e., the inactive controller/datapath pairs). Power reduction is accomplished because only one smaller processor is active at a time. In addition to power reduction, functional partitioning also provides solutions to a variety of synthesis problems and does not require the modification of the synthesis tool. We present results showing that this FSMD functional partitioning technique can reduce power, on average, 42% over unoptimized systems.