Trezor produces chips for hardware wallets to shorten the supply cycle
Hardware wallet maker Trezor is accelerating production of new Trezor wallets by producing its own wallet silicon chips.
Trezor officially announced on February 27 that the firm will begin facilitating the production of its own key component, the chip package, in its flagship Trezor Model T product.
The move aims to significantly optimize the production of Trezor wallets, reducing supply cycle lead times from two years to several months.
The optimization will also eliminate delays in the delivery of finished products and protect consumers from exposure to price fluctuations based on component supply and demand, Trezor said. As previously reported, demand for Trezor wallets increased by at least 300% in the wake of the FTX collapse in November 2022, as crypto investors rushed to move their crypto holdings from centralized crypto exchanges.
Before becoming a wallet chip manufacturer, Trezor was exposed to third-party supply vulnerabilities due to factors such as geopolitical disruptions, labor shortages due to COVID-19, crypto market conditions, and other events. By taking control of supplying wallet chips, Trezor has been given the ability to react quickly to all of these factors and meet demand at all times.
“By unpacking the process, identifying areas where we can take control, and working with our partner STMicroelectronics in new ways, we’ve managed to make production as agile as it can be,” said CFO Štěpán Uherik.
The new business model also enables more design freedom for Trezor’s future products, allowing the wallet vendor to build the hardware wallet devices from scratch on its own.
The news comes a year after Tropic Square, a startup run by Trezor’s parent company Satoshi Labs, launched a new open source chip known as TROPIC01. The chip provides cryptographic key generation, encryption, signing and authentication of users through digital identification methods. Trezor was reportedly expected to be Tropic Square’s first customer for the product.
“The chosen business model is very unique and can be used in exceptional cases. Firstly, as a manufacturer we require high minimum order quantities, and secondly, the customer needs to have specific knowledge to encapsulate semiconductor components, said STMicroelectronics Sales Manager Tomáš Pokorný.
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Trezor initially announced plans to take control of wallet chip production in partnership with Tropic Square in May 2020, citing a wide range of reasons for such a move, including expensive government certification of chip suppliers. According to Trezor, government certification policies exclude independent companies and open source initiatives from being used in professional areas.
