Makers in the smartphone supply chain in Taiwan have become more cautious about accepting orders from China-based smartphone vendors because of sharp fluctuations in order volumes and unsteady delivery schedules, according to industry sources.

Increasing market competition and shortened product life-cycles have forced China's smartphone vendors to place orders in small volumes but with multiple designs, a business model which makes it difficult for Taiwan-based handset suppliers to generate sufficient profits, the sources noted.

Taiwan-based smartphone ODMs and handset component suppliers are currently undertaking orders mainly from China's second- and third-tier vendors, which struggle to place orders for a single model in large volumes, commented the sources.

Compal Communications revealed that it has received a number of orders from local brands in China, but noted that it will take a cautious attitude about accepting orders from China in order to safeguard its profitability.