Compal Communications is expected to manufacture low-cost GSM handsets for Nokia on an EMS (electronics manufacturing service) basis, with volume shipments likely to begin the earliest at the end of 2008, according to a Chinese-language Commercial Times report. In 2007, Compal landed a Nokia order to produce CDMA handsets, noted the paper.

New orders from Nokia will help Compal boost the utilization rate of its handset plant in Nanjing, China, said the paper, noting that orders from Motorola took up only 50% of the plant's production capacity.

Compal expects its handset shipments in the second quarter of this year to stay flat with the 10 million units that its shipped in the first quarter, the paper quoted sources at Compal as indicating.