HTC who rolled out their new Touch Diamond phone this week in partnership with Telstra have told DigiTimes that they expect to be hitting a million units a month by mid August.

CEO Peter Chou said that it took about five months for HTC to ship up to one million units of its first touch-screen handset, the HTC Touch, noted market sources.

Chou also reaffirmed that HTC is definitely able to reach its goal of shipping two million Touch Diamond handsets by the end of 2008.

However, sources at the Taiwan handset industry speculated that HTC will eventually revise upward its shipping target for this year, and that HTC is likely to ship 2.5-3 million Touch Diamond handsets before the end of the year.

Despite market concerns of declining gross margins at HTC, Chou said that HTC is expected to report gross margins of 34-35% in the third quarter of this year, which will be still relatively higher compared to the market average, Chou contended.

In other news, HTC's new plant in Shanghai is expected to begin volume production in October this year with a capacity of one million handsets per month, according to Jack Tong, vice president of HTC Asia.

The Shanghai plant will focus on the production of 2.5G handsets and other models that have entered volume production, Tong added.