FOXCONN, the world's biggest contract manufacturer of mobile phones, plans to invest at least US$500 million in the next few years in a south China city to build a handset plant to expand capacity, according to a media report yesterday.

The plant, likely to employ more than 40,000 workers, is in Huizhou in Guangdong Province and will start construction in January and begin production by the end of next year. The plant's annual revenue will reach two billion yuan (US$266 million), the Nanfang Metropolis Daily reported yesterday.

The Huizhou factory may eventually become larger than the company's facility in Shenzhen, also in the province, where the company has its headquarters, the company said without providing further details.

Efforts to reach Edmund Ding, Foxconn's spokesperson, by phone and e-mail yesterday were unsuccessful.

"Foxconn will benefit from a wider adoption of metal casing by its leading clients for handset and handheld devices," Merrill Lynch said in a report last month, .

Foxconn, 31 percent owned by Taiwan-based Hon Hai, counts Nintendo, Motorola, Apple, Nokia, Sony, HP and Dell as clients.