China government-developed Zhengzhou Airport Comprehensive Economic Experimental Zone (ZACEEZ) in northern China has a cluster of nearly 70 handset supply chain makers currently and is set to replace Shenzhen in southern China to become the largest handset production base in the world, according to Taiwan-based handset supply chain makers.

Taiwan-based EMS provider Foxconn Electronics started constructing factories at ZACEEZ in 2010 and production began in March 2011, the sources said. Foxconn began volume production of iPhone 6 and iPhone 6 Plus in ZACEEZ in the second half of 2014, the sources indicated.

China-based handset vendors including ZTE, Coolpad, K-Touch, Skyworth and Kliton have also set up operations at ZACEEZ, the sources said.

The number of firms at ZACEEZ - including device makers, suppliers of PCBs, panels, CCMs (compact camera modules), chassis, battery packs and other components, as well as solution and software developers and logistics operators - is expected to increase to 120 by the end of 2015 and to more than 500 eventually, the sources indicated.

A total of 143 million smartphones, including 120 million iPhone units, were produced in ZACEEZ in 2014, the sources said. The annual handset output at ZACEEZ is estimated at 200 million units in 2015 and will increase to 400 million in 3-5 years, the sources indicated.