China-based smartphone vendors are likely to place more orders for mid-range to high-end models with Taiwan-based handset ODMs as they are shifting their focus to the high-end segment, according to industry sources in Taiwan.

Increasing shipment volumes from China-based players, including Huawei, Oppo, Vivo and Xiaomi Technology, is another reason for these vendors to look for additional suppliers to secure enough production capacity to fulfill their orders, said the sources.

China-based ODM BYD Electronic reportedly has been forced to turn down orders from Huawei recently due to its limited production capacity, the sources indicated.

Huawei aims to ship 120 million smartphones in 2016 compared to 108 million units shipped a year earlier. Meanwhile, Oppo targets to ramp up its shipments by over 30% on year to 80 million units in the year, as Vivo aims to boost its shipments to 60-70 million from the 50 million.

While continuing to solidify their market share in the low-end segment in the domestic market, most handset players in China have also shifted their focus to overseas markets and high-end segment in order to sustain sales growth and improve profits, commented the sources.

For example, sales of the mid-range and high-end smartphones currently account for over 40% of Huawei's total overseas smartphone shipments.

Additionally, sales of smartphones by Huawei have outperformed those from Samsung and Apple in a number of markets in Europe, including Spain and Portugal, noted the sources.

The product shifts initiated by China's handset vendors will benefit Taiwan-based ODMs, including the Foxconn Group, Compal Electronics, Arima Communications and Pegatron, said the sources.