This is the sort of rumor that needs to be taken with a grain of salt. I always point out that there is usually a grain of truth in DigiTimes rumors based on supply chain leaks, but that's more true when it comes to devices Apple is ordering or testing.
For a rumor on who has been awarded a manufacturing contract by Apple, I am much more skeptical. Even if it's accurate at its core, it's impossible to know if Apple is ordering short runs for testing, a partial order for manufacturing or assembling a subsystem, or any other number of permutations.
This is especially true with time lines. DigiTimes reported that the large sized iPad—a rumored device that will be in the 12-inch range—will be produced for release in the second half of 2014. While I am convinced Apple is working on such a device, no one but Apple knows when the company will release it. You can safely ignore that date in my opinion.
Then there's the iWatch rumor. The article said that pilot production of the iWatch has begun. That's not only possible, it's in keeping with other rumors about this unannounced device. Those same sources said that Apple has “invited” Inventec, Quanta, and Foxconn to work on the device, but that who gets to do what hasn't been decided.
There's not enough meat on that rumor bone to gnaw over the details. There is strong evidence that Apple is working on this device, and at some point someone will be selected to make it. Until we get some more specifics coming out of Apple's supply chain, that's about all we know.