Is a low-cost or budget iPhone on the way? A key Taiwanese supplier of Apple's (NASDAQ: AAPL) mobile devices plans to increase its workforce in China by as much as 40 percent this summer, a move that suggests the vendor may be readying a less expensive model of its wildly popular iPhone.

Pegatron, which already manufacturers both the iPhone and iPad, said it expects to bump its number of workers to 140,000 from existing levels, according to a Reuters report. For some clues about what they might be up to read on...

Chatter about Apple building a lower-cost iPhone reached a crescendo in mid-April when pictures of the supposed device’s casing surfaced at Tactus that matched a January picture shown at Macrumors. Those reports suggest that the case is made of plastic. Word is the budget iPhone is powered by an A5 chip and features a 3.5-inch Retina display, although that may conflict with other reports of a 4-inch display as on the iPhone 5. The lower cost model is said to have a 5-megapixel rear camera and come in colors black, white, blue, red and yellow. It’s price point? Maybe $300 for an off-contract unit. Or not. It’s all guess work at this point.

Reuters said its information came from Apple suppliers talking about the vendor developing a low-cost iPhone as it schemes to expand its customer base to growth markets and lower-income buyers. That fits with the buzz in that there have been constant reports that Apple will unleash the budget iPhone by October, 2013.

Charles Lin, Pegatron CFO, told Reuters that the company expects to generate some 60 percent of its revenue in the second half of this year. He did not provide any details about whether or not Pegatron would be making a budget iPhone or if the unit will be made in the latter half of 2013.

He did, however, acknowledge that Pegatron will be making new models based on Intel’s (NASDAQ: INTC) new Haswell processor.