Apple is investigating an explosion that killed two people, injured 16 and forced a production halt at a Foxconn International Holdings factory in China said to produce the popular iPad 2. Foxconn, part of Taiwan's Hon Hai Precision Industries group and Apple's main manufacturing partner, said in a statement the explosion happened around 7pm local time on May 20. "Production has been suspended at the site of the explosion until the completion of the investigation," Foxconn said in a statement. "The safety of our employees is our highest priority and we will do whatever is required to determine and address the cause of this tragic accident." It did not name the affected plant or say what it made, but China's official Xinhua News Agency said it was the Hongfujin Precision Electronics plant in a high-tech industrial zone west of Chengdu, the capital of Sichuan province. Hon Hai spokesman Edmund Ding said the company is still evaluating losses. He could not say whether group founder and chairman Terry Gou had gone to the site. Apple shares closed down 1.56 per cent at $335.22 (Dh1,231) on the Nasdaq, which saw a broad sell-off on Eurozone debt worries. Supply affected The explosion could affect the supply of iPads and investors were watching closely. Apple spokesman Steve Dowling said the company was assessing the situation. "We are deeply saddened by the tragedy at the Foxconn plant in Chengdu and our hearts go out to the victims and their families," he said. "We are working closely with Foxconn to understand what caused this terrible event." Setback for Foxconn The plant explosion is the latest setback for Foxconn, the world's largest contract manufacturer. The company made headlines last year after reports emerged about poor working conditions at factories in southern China, which critics say may have helped drive several employees to suicide. The company pledged to improve employee welfare.