Kuo's prediction is based off of estimates that Apple Watch production will ramp up to 2.3 million units by the end of May in order to meet pre-order demand. In the report, as obtained by Apple Insider, Kuo breaks that 2.3 million unit figure down by specific models:

By model, Kuo estimates 85 percent of orders will go to Apple Watch Sport, 15 percent to stainless steel Apple Watch versions and 1 percent to pricey solid gold Apple Watch Edition iterations. .

According to the report, Kuo also says that Apple is currently facing production issues with the Apple Watch's vibration unit and the display, but the analyst predicts Apple will hit a production target of 2.5 million units by the end of June.

On a final note, Kuo reportedly also claims that Apple has decided to turn to TSMC to produce at least a portion of its upcoming A9 chipset, contrasting with a previous report that Samsung would receive the orders. From Apple Insider:

Well-connected analyst Ming-Chi Kuo of KGI Securities issued a note to investors on Wednesday, a copy of which was obtained by AppleInsider, revealing that Apple has apparently made what he called a "last-minute decision to recruit TSMC." Apple is said to have called an audible after partner GlobalFoundries continued to experience poor yield rates on production of the next-generation CPU.

As with all analyst estimates, keep in mind that nothing here is official until Apple releases its own numbers. However, Kuo's estimates follow on others that have estimated that the Apple received around one million Apple Watch pre-orders in the U.S. during the launch day alone.

Source: Apple Insider (1, 2)

Apple Watch