Crypto wallet maker Trezor recently decided to start manufacturing its own hardware wallet chips to respond quickly to demand-triggering events like the FTX collapse.
Trezor announced on Feb. 27 that it would begin producing the chip wrapper, a crucial component for the Trezor Model T — its flagship device. The move will reportedly cut the supply cycle lead times from two years to a few months in the production of Trezor wallets.
According to Trezor, the decision will also address shipment delays of finished products and shield customers from price swings caused by component supply and demand changes. After the FTX crash in November 2022, investors rushed to move their crypto holdings off of centralized crypto exchanges, which caused the demand for Trezor wallets to increase by over 300%.
Štěpán Uherík, chief financial officer at Trezor, told Cointelegraph that the chip shortage in recent years also prompted the decision:
“Trezor decided to take control of part of the chip manufacturing process in response to the global chip shortage at the turn of 2021 and 2022. This decision was made to ensure the continuous production of our devices, despite the prolonged delivery time from the usual 12 weeks to 90 weeks.”
The semiconductor shortage has been a problem for the world over the past few years.
These complicated electronics are pivotal in today’s world, as they carry electricity between metals and isolates. Silicon-based semiconductors are found in practically all modern gadgets — from smartphones to computers to automobiles.
Semiconductor sales reached a global high in 2021 as people stranded at home during the COVID-19 pandemic purchased more consumer electronics. Major graphics processing unit (GPU) manufacturers like Nvidia saw record-breaking production as the number of GPUs produced skyrocketed. The cost of electronics surged, and semiconductors were hard to come by for producers of related goods.
Further demand was attributed to cryptocurrency miners using GPUs for mining proof-of-work (PoW) based cryptocurrencies. Over 10% of Taiwan semiconductor sales in 2018 came from cryptocurrency-focused buyers. The struggle to keep up with demand in 2021 led Nvidia to restrict the use of its gaming chip for crypto mining — citing the industry-wide shortage.
Demand for semiconductors from the crypto market further decreased with the advent of the prolonged bear market in…
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