Hardware wallet maker Trezor is ramping up production of new Trezor wallets by producing its own wallet silicon chips.
Trezor officially announced on February 27 that the company will start facilitating the production of its own main component, the chip package, in its flagship product, the Trezor Model T.
The move aims to significantly optimize the production of Trezor wallets, reducing the lead time in the supply cycle from two years to several months.
The optimization will also eliminate delays in shipping finished products and protect consumers from price fluctuations based on component supply and demand, Trezor said. As previously reported, demand for Trezor wallets increased by at least 300% after FTX collapsed in November 2022 as crypto investors rushed to move their crypto holdings away from centralized crypto exchanges.
Before becoming a wallet chip producer, Trezor experienced third-party supply vulnerabilities due to factors such as geopolitical disruptions, labor shortages due to COVID-19, crypto market conditions and other events. By controlling the supply of wallet chips, Trezor gets the opportunity to respond to all these factors quickly and meet demand at all times.
“By unpacking the process, identifying areas where we can take control, and collaborating with our partner STMicroelectronics in a new way, we have managed to make manufacturing as agile as possible,” chief financial officer Štěpán Uherik said.
The new business model also enables more design freedom for Trezor’s future products, allowing wallet providers to build hardware wallet devices from scratch themselves.
The news comes a year after Tropic Square, a startup operated by Trezor’s parent company Satoshi Labs, opened The new open-source chip is known as TROPIC01. The chip provides cryptographic key generation, encryption, signature and user authentication through digital identification methods. Trezor will reportedly be Tropic Square’s first customer for the product.
“The chosen business model is very unique and can be applied in exceptional cases. Firstly, as a manufacturer, we require a high minimum order quantity, and secondly, the customer must have special knowledge to encapsulate semiconductor components,” said STMicroelectronics sales manager Tomáš Pokorný.
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Trezor initially announced plans to control the production of wallet chips in collaboration with Tropic Square in May 2020, citing various reasons for the move, including expensive government certification of chip vendors. According to Trezor, the country’s certification policy “excludes independent companies and open source initiatives from being used in professional areas.”