TEE vs Enclave vs HSM: Understanding Hardware Security Technologies

Meta Description: Learn the differences between Trusted Execution Environments (TEEs), secure enclaves, and Hardware Security Modules (HSMs). Discover which technology to use for your security needs.

Target Keywords: TEE vs enclave, TEE vs HSM, hardware security comparison, Intel SGX vs AMD SEV, secure enclave, hardware security module difference

Reading Time: 12 minutes

TL;DR - TEE vs Enclave vs HSM

Trusted Execution Environments (TEEs), Secure Enclaves, and Hardware Security Modules (HSMs) are all hardware-based security technologies, but they serve different purposes:

• TEE (AMD SEV, Intel TDX): Protects entire virtual machines or large applications; isolates at the VM/OS level
• Enclave (Intel SGX, ARM TrustZone): Protects small, security-critical code sections within an application; isolates at the process level
• HSM: Dedicated hardware appliance for cryptographic operations and key storage; physically separate from compute

Quick Decision Guide:

• Need to protect an entire application or VM? → Use TEE
• Need to protect a specific function (cryptographic operations, secret handling)? → Use Enclave
• Need tamper-proof key storage or regulatory compliance (FIPS 140-2/3)? → Use HSM
• Need all three? → Use them together in a layered security architecture

Understanding the Hardware Security Landscape

All three technologies—TEEs, Enclaves, and HSMs—solve a common problem: protecting sensitive data and computations from software attacks, malicious administrators, and infrastructure compromise. However, they approach the problem differently and are optimized for different use cases.

The Core Problem

Traditional software security relies on trust:

• Trust the operating system to enforce access controls
• Trust administrators not to abuse elevated privileges
• Trust the cloud provider not to inspect your VMs

Hardware security eliminates these trust dependencies by using physical isolation and cryptography enforced by the CPU or dedicated hardware, making attacks mathematically infeasible rather than just policy-prohibited.

Trusted Execution Environments (TEEs)

What Are TEEs?

A Trusted Execution Environment is a secure area created by the CPU that protects code and data from unauthorized access, including from the operating system, hypervisor, and privileged users.

Modern TEE Technologies:

• AMD SEV (Secure Encrypted Virtualization): Encrypts entire VM memory
• AMD SEV-SNP: Adds integrity protection to prevent memory remapping attacks
• Intel TDX (Trust Domain Extensions): Creates isolated “Trust Domains” (TDs) for confidential VMs
• ARM CCA (Confidential Compute Architecture): “Realms” for confidential VMs on ARM servers

How TEEs Work

Key Characteristics:

• Scope: Protects entire VMs or large application stacks
• Memory: Gigabytes to terabytes (limited only by system RAM)
• Performance Overhead: 2-10% for most workloads
• Isolation Level: VM-level (everything inside the VM is protected)
• Trusted Computing Base (TCB): OS + application code

When to Use TEEs

Best For:

• Entire applications that need protection (web apps, databases, AI models)
• Lift-and-shift cloud migrations (minimal code changes)
• Multi-tenant clouds where customer data must be isolated
• Regulated industries (healthcare, finance, government)

Example Use Case: A hospital runs a patient records database in an Azure Confidential VM (Intel TDX). The entire database, OS, and queries are protected. Azure administrators cannot access patient data even if they want to.

Secure Enclaves

What Are Enclaves?

A Secure Enclave is a small, isolated region of memory within a running application where sensitive code and data are protected from the rest of the system, including the operating system.

Modern Enclave Technologies:

• Intel SGX (Software Guard Extensions): x86 CPU enclaves (up to ~256MB encrypted memory)
• ARM TrustZone: Mobile/embedded enclaves (used in smartphones, IoT)
• AMD SEV-ES + Enclaves: Emerging enclave support on AMD platforms

How Enclaves Work

Key Characteristics:

• Scope: Protects small, security-critical functions within an app
• Memory: Limited (128-256MB for Intel SGX, varies for TrustZone)
• Performance Overhead: 5-50% depending on how much data crosses the enclave boundary
• Isolation Level: Process-level (only specific functions are protected)
• Trusted Computing Base (TCB): Only the enclave code (very small)

When to Use Enclaves

Best For:

• Protecting specific functions (cryptographic operations, authentication, secret handling)
• Applications where you control the codebase and can refactor
• Small data processing (PII handling, financial transactions)
• Minimizing Trusted Computing Base (only security-critical code in enclave)

Example Use Case: A payment processing app uses an Intel SGX enclave to decrypt credit card numbers and authorize transactions. The rest of the app (logging, analytics, UI) runs outside the enclave. Even if the OS is compromised, credit card data remains encrypted in the enclave.

Hardware Security Modules (HSMs)

What Are HSMs?

A Hardware Security Module is a dedicated, tamper-resistant physical device designed specifically for cryptographic operations and secure key storage. HSMs are separate from the servers running your applications.

Common HSM Providers:

• Thales Luna HSM: FIPS 140-2 Level 3 certified
• AWS CloudHSM: Managed HSM service
• Azure Dedicated HSM: Cloud HSM integration
• Yubico YubiHSM: Compact USB HSMs for smaller deployments

How HSMs Work

Key Characteristics:

• Scope: Cryptographic key management and operations
• Memory: Small (kilobytes to megabytes—just for keys and crypto state)
• Performance: High-speed crypto operations (10,000s of signatures/sec)
• Isolation Level: Physically separate device
• Compliance: FIPS 140-2/3 certified (required for government, finance)

When to Use HSMs

Best For:

• Storing and using cryptographic keys that must never be exposed
• Compliance requirements (FIPS 140-2 Level 3, PCI-DSS, eIDAS)
• Root certificate authorities (CAs)
• Payment processing (protecting card encryption keys)
• Blockchain validators (securing private keys for millions in crypto)

Example Use Case: A certificate authority (CA) uses an HSM to store its root signing key. The private key never leaves the HSM; all certificate signing operations happen inside the tamper-resistant hardware. Even CA admins cannot extract the key.

Head-to-Head Comparison

Combining TEEs, Enclaves, and HSMs

For maximum security, use all three together in a defense-in-depth architecture:

Example: Confidential AI Platform

Layer 1: HSM for Key Management

• Root encryption keys stored in AWS CloudHSM (FIPS 140-2 Level 3)
• HSM generates data encryption keys (DEKs) for each AI model
• Private keys for attestation and client authentication never leave the HSM

Layer 2: TEE for AI Workload

• AI training and inference run in Azure Confidential VMs (AMD SEV-SNP)
• Entire VM memory is encrypted
• DEKs from HSM are used to decrypt model weights inside the TEE

Layer 3: Enclave for Sensitive Operations

• Within the confidential VM, an Intel SGX enclave handles:
• Decrypting user queries
• Signing inference results
• Attestation report generation
• Even if the TEE (VM) is compromised, the enclave provides an additional layer

Result:

• HSM ensures root keys are tamper-proof and FIPS-compliant
• TEE protects the entire AI workload (training data, model weights)
• Enclave adds extra protection for the most sensitive operations

Compliance: Satisfies HIPAA, PCI-DSS, FedRAMP High requirements

Choosing the Right Technology

Decision Tree

1. What do you need to protect?

• Cryptographic keys only → HSM
• Small, specific functions in an app → Enclave
• Entire applications or VMs → TEE

2. What’s your compliance requirement?

• FIPS 140-2 Level 3 required → HSM (only technology with this certification)
• GDPR, HIPAA, general data protection → TEE or Enclave (both work)
• No specific requirement → Choose based on use case

3. How much can you modify your code?

• Cannot change code (legacy apps) → TEE (lift-and-shift)
• Can refactor for security → Enclave (minimize TCB)
• Only need crypto API → HSM (integrate via SDK)

4. What’s your budget?

• Cloud budget (pay-as-you-go) → TEE (~10-30% premium on VMs)
• Moderate budget → Enclave (often included in CPU, just dev effort)
• Large budget (enterprise, government) → HSM ($1,000-20,000 per device)

5. Where is your data?

• In the cloud → TEE (best cloud integration)
• On-premises → Enclave or HSM (more control)
• Edge/mobile → Enclave (ARM TrustZone, low power)

Real-World Scenarios

Scenario 1: Healthcare AI in the Cloud

Requirement: Train AI on patient data in the cloud while complying with HIPAA

Solution: TEE (AMD SEV-SNP Confidential VM)

Why:

• Need to protect entire datasets (GBs of medical records)
• Cannot refactor existing TensorFlow training code for enclaves
• HIPAA requires encryption in use (TEE provides this)
• HSM alone doesn’t protect data during computation

Implementation: Deploy training pipeline in Google Confidential VMs; use HSM for encrypting model exports

Scenario 2: Payment Card Processing

Requirement: Decrypt and process credit card numbers while complying with PCI-DSS

Solution: Enclave (Intel SGX) + HSM

Why:

• PCI-DSS requires FIPS 140-2 compliance (HSM stores card encryption keys)
• Only card decryption logic needs protection (enclave is efficient)
• Enclave minimizes Trusted Computing Base (reduces audit scope for PCI)

Implementation: HSM stores Card Decryption Keys (CDKs); SGX enclave fetches keys from HSM and decrypts card data inside enclave

Scenario 3: Blockchain Validator

Requirement: Secure private keys for a proof-of-stake validator managing $10M in crypto

Solution: HSM (Yubico YubiHSM or Ledger Nano HSM)

Why:

• Only need to protect a single private key (32 bytes)
• Physical tampering is a real threat (HSMs are tamper-resistant)
• Validator software doesn’t need protection (key signing happens in HSM)

Implementation: Validator software calls HSM API to sign blocks; private key never leaves the HSM

Scenario 4: Confidential SaaS Platform

Requirement: Offer SaaS AI features where customers can verify their data is isolated

Solution: TEE (Confidential VMs per customer) + Remote Attestation

Why:

• Each customer gets a dedicated confidential VM (strong isolation)
• Attestation proves to customers that isolation is enforced
• No code changes required (existing SaaS app runs in TEE)

Implementation: Deploy on Phala Cloud or Azure Confidential Computing; provide attestation dashboard to customers

Limitations and Trade-offs

TEE Limitations

Cons:

• Larger Trusted Computing Base (entire OS is trusted)
• Cannot protect against bugs in the OS or app code
• Performance overhead (~2-10%)
• No live migration (VMs must be terminated for maintenance)

Best For: Large applications, cloud workloads, lift-and-shift scenarios

Enclave Limitations

Cons:

• Small memory (<256MB for Intel SGX)
• High development effort (code refactoring required)
• Significant performance overhead if data crosses enclave boundary frequently
• Limited ecosystem (fewer tools than TEEs)

Best For: Small, security-critical functions; minimizing TCB; high-assurance scenarios

HSM Limitations

Cons:

• Only protects keys, not data or computation
• Expensive ($1,000-20,000 per device + maintenance)
• Latency for network-attached HSMs (1-10ms per operation)
• Doesn’t scale elastically (physical devices)

Best For: Key management, compliance, root CAs, payment processing

The Future: Convergence and Integration

Trends

1. TEEs with Enclave Features

Future CPUs will blur the lines:

• AMD SEV with sub-VM enclaves
• Intel TDX with SGX-like partitions within Trust Domains

Result: Get both large-scale protection (TEE) and minimal TCB (enclave) in one solution

2. HSMs Integrated with TEEs

Cloud providers are integrating HSMs with confidential VMs:

• AWS Nitro Enclaves + CloudHSM integration
• Azure Confidential VMs + Dedicated HSM

Result: Root keys in HSM, computation in TEE, best of both worlds

3. Confidential Cloud-Native Stack

Future platforms will offer:

• TEE-based confidential Kubernetes
• Enclave-based service mesh (secure microservices communication)
• HSM-backed secret management

Result: End-to-end confidential computing without manual integration

4. Hardware Attestation Standards

The Confidential Computing Consortium is developing:

• Unified attestation formats (works across AMD, Intel, ARM, NVIDIA)
• Cross-vendor trust (verify TEEs from different manufacturers)

Result: Mix TEEs, enclaves, and HSMs from different vendors seamlessly

Frequently Asked Questions

Can I use Intel SGX and AMD SEV together?

Yes. You can run an AMD SEV-SNP confidential VM and use Intel SGX enclaves within it (if the CPU supports both). This provides defense-in-depth: the VM-level TEE protects the whole application, and the enclave adds extra protection for sensitive functions.

Is Intel SGX a TEE or an enclave?

Intel SGX is an enclave technology. It protects small memory regions within a process, not entire VMs. AMD SEV and Intel TDX are TEEs because they protect entire virtual machines.

Do I need an HSM if I’m using a TEE?

Not always. TEEs can handle many use cases without an HSM. However, if you need:

• FIPS 140-2/3 certification (compliance requirement)
• Physical tamper resistance (protecting keys worth millions)
• Long-term key storage (keys that must survive server failures)

Then add an HSM for root key management while using the TEE for data processing.

Which is more secure: TEE or enclave?

Enclaves have a smaller Trusted Computing Base (only the enclave code), which theoretically makes them more secure. However, TEEs protect more data and are easier to deploy. For most use cases, both provide strong security. Use enclaves when you need maximum assurance and can afford the development effort.

Can HSMs protect data in use?

No. HSMs only protect cryptographic keys and perform cryptographic operations. They don’t protect data during general computation. For data in use protection, you need a TEE or enclave. HSMs complement TEEs/enclaves by securing the encryption keys used by those technologies.

What’s the difference between Intel SGX and ARM TrustZone?

Both are enclave technologies, but:

• Intel SGX: x86 CPUs, up to 256MB encrypted memory, for servers and PCs
• ARM TrustZone: ARM CPUs, variable memory (often smaller), for mobile and embedded devices

SGX is better for server-side secure enclaves; TrustZone is better for mobile/IoT use cases.

Are TEEs and enclaves vulnerable to side-channel attacks?

Potentially, yes. Academic research has shown side-channel attacks (Spectre, Meltdown, cache timing) against both TEEs and enclaves. However:

• Modern CPUs include mitigations (AMD SNP, Intel TDX have protections)
• Practical attacks are difficult and require proximity
• Risk is far lower than trusting administrators

Always use the latest CPU generations and keep firmware updated.

Conclusion

TEEs, Enclaves, and HSMs are complementary technologies:

• TEEs: Best for protecting entire applications and large datasets in the cloud
• Enclaves: Best for small, security-critical functions where you can minimize the Trusted Computing Base
• HSMs: Best for cryptographic key management and compliance

For maximum security, use them together in a layered architecture:

• HSM for root keys
• TEE for data and applications
• Enclave for the most sensitive operations

As hardware security evolves, these technologies will converge, making confidential computing easier and more powerful. The future of cloud computing is confidential by default—and TEEs, enclaves, and HSMs are the foundation.

Related Resources

• Phala Homepage
• Learning Hub
• Phala Cloud Documentation
• Dstack Documentation
• Success Stories

Next Steps

• Get Started with Phala Cloud
• Deploy Your First Confidential VM
• Explore Confidential AI
• Join Our Startup Program
• Contact Us