FIH Mobile, an OEM handset arm of the Foxconn Group, is building new production lines in Guizhou, China in order to produce handsets for Huawei, according to Japan-based Nikkei report.

Foxconn has set up a large-scale data center in Guizhou and has been cooperating with Huawei to develop the local cloud server market.

The increased orders from Huawei will help FIH Mobile make up a possible 10% decline in handset orders from Xiaomi Technology, said the report.

Meanwhile, the expanded cooperation between Foxconn and Huawei will help the China smartphone vendor to reach its goal of shipping over 200 million smartphones a year within the next five years, according to a Chinese-language Economic Daily News (EDN) report.