According to a report on BGR today, the Taiwan Economic News has printed a story saying that Pegatron has undercut rival Hon Hai (owner of Foxconn) in a bid to win an exclusive contract from Apple to manufacture the iPad 3, and has come away the winner. The Taiwan Economic News reveals that Taiwan-based Pegatron has also won a contract from Apple to produce 15 million iPhone 5s. If this report is correct, it marks a significant move by Apple, as Foxconn currently makes the iPad 2 as well as several other iPad products. Although the reasons for Apple choosing to go elsewhere for the iPad 3 and iPhone 5 were not given in the report, it’s possible that the bad publicity surrounding working conditions at Foxconn’s plants in China, including many suicides and a recent tragic explosion might have finally persuaded Apple to make the change. BGR also notes that aside from moving its manufacturing from Hon Hai to Pegatron, Apple will continue to use most of its current supply line, including TPK Holdings who make touch panels, Simplo Technology and Dynapack Technology who make batteries, Largan Precision who make the camera lenses, and Foxconn who make the outer casings.

Update: TUAW is saying they believe that Pegatron has not won an exclusive contract instead of Hon Hai, but in fact will be manufacturing the iPad 3 as well as Hon Hai (Foxconn), not instead of.

Source: Exclusive iPad 3 contract goes to Pegatron, not Foxconn
Apple allegedly approves Pegatron for iPad 3 production, but is not replacing Foxconn | TUAW - The Unofficial Apple Weblog