While parts and component makers in Taiwan's handset supply chain are still receiving substantial orders from China-based white-box handset makers, orders are likely to reduce gradually due to a saturating domestic market in China and increasing shipments from first-tier brand vendors, according to sources from Taiwan's handset supply chain.

Smartphone shipments from the top-five vendors in China expanded to 60% in 2015 compared to 44% in 2014, indicating that more white-box makers were losing their share to first-tier brand vendors, said the sources.

Xiaomi Technology, Huawei, Apple, Oppo and Vivo are currently the top-five smartphone brands in China, according to IDC.

Furthermore, smartphone shipments grew only 2% on year in China in 2015 compared to 150% in 2011, putting more pressure on the operations of white-box makers, indicated a recent Chinese-language Liberty Times report, citing data from Canalys.

As a result, about half of over 300 handset makers which are still operating in China currently are likely to phase out of the market within one year due to dwindling shipment growth, said the report.

Although the remaining white-box makers are currently still able to continue to secure significant orders from clients in emerging markets, including India, the Middle East and Russia, continued shipment ramps by first-tier brands in the future will further constrain the operations of white-box makers, the sources warned.