Taiwan-based manufacturers will be making more than a quarter of all mobile phones within two years, analysts predict.

The number of handsets rolling off production lines in Taiwanese-owned factories, many of them situated in China, will reach 281 million by 2008, according to new forecasts from ABI Research. 

As well as manufacturing the phones, Taiwanese firms are taking over an ever-growing percentage of the design burden from brand-name phone vendors, a role referred to as Original Design Manufacturer (ODM).

"Taiwan's ODMs gain cost advantages by setting up plants in mainland China, and their leading role in supplying handset components is helping to improve their cost structure and complete their supply chain," said ABI Research analyst Junmei He. 

"Handset shipments from Taiwan will reach 281 million in 2008, 79 per cent of which will be ODM handsets, and these shipments will account for 26 per cent of total handset shipments globally."

The share of the global market held by Taiwanese firms such as BenQ, Compal Communications and Arima has doubled since 2004, when they produced 70 million handsets and accounted for 12 per cent of worldwide unit sales. 

The country's phone makers are now generating more than $2bn a quarter from sales, according to recent data from the Market Intelligence Center, a publicly-funded Taiwanese technology think-tank.