Apple rumored to be expanding iPhone production to Foxconn subsidiary

Shares of Foxconn International Holdings (FIH) rose more than ten percent on Friday local China time, after a brokerage report claimed the company may start manufacturing an iteration of Apple's iPhone within the next few months, reports Reuters.

According to findings from Daiwa Capital Markets, FIH is likely to get iPhone orders "soon," despite not having any previous or current business dealings with Apple. The Foxconn Technology subsidiary is the world's largest contract maker of mobile phones, and builds products for Nokia, Huawei and ZTE, however the manufacturer has never been tapped to assemble Apple devices.

"Our industry research indicates that FIH is likely to start producing iPhones in late 2012 or early 2013," Daiwa's report said.

The news comes on the heels of a report claiming quality control issues have hampered Foxconn's ability to produce enough iPhone 5 units to keep up with expectedly massive demand.

It was said that Apple's decision to return to a metal back casing, instead of the "glass sandwich" design seen with the iPhone 4 and 4S, has caused issues with nicks and scratches appearing on brand new out-of-the-box units. Dubbed "scuffgate," the blemishes reportedly prompted Apple to instruct Foxconn to employ stricter quality control methods, which subsequently lower production yield rates.

It is unclear whether Friday's reported expansion to another iPhone producer stems from the purported manufacturing problems, though it is well known that stock of Apple's newest smartphone has been constrained since the product launched in September.

FIH declined to comment on the matter, but said it will release an official statement later today.