Chip suppliers involved in the supply chain of the Apple Watch are gearing up to start production for the upcoming wearable device, according to industry sources.

Orders for chips for the Apple Watch, set to debut in early 2015, are estimated at 30-40 million units, the sources indicated.

The Apple Watch uses Apple's custom-designed system-in-package (SiP) chip, which miniaturizes an entire computer architecture onto a single chip.