CORRECTED-UPDATE 2-Investors sell off Sharp shares on Hon Hai uncertainty

(Corrects Reuters Instrument code for Sharp)

* Sharp: still in talks after Hon Hai chairman's departure

* Sharp shares slide 11 percent

TOKYO, Aug 31 (Reuters) - Investors sold off Sharp Corp shares, frustrated by the uncertainty over a hoped-for deal between Japan's last major LCD TV maker and Hon Hai Precision Industry, a tie-up that the Japanese company needs to secure its long-term viability.

Hon Hai Chairman Terry Gou, who was visiting the liquid crystal display plant in western Japan that he owns jointly with Sharp, skipped a planned media briefing at the factory on Thursday and returned to Taiwan. The unexpected departure scotched expectations that an agreement for Hon Hai to buy a 9.9 percent stake in Sharp would emerge on Friday.

"Investors are just very uncertain, it's very opaque," said Kenichi Hirano, operating officer at Tachibana Securities.

"Sometimes these negotiations break down, and maybe that's Hon Hai strategy," said Hirano, adding that he expects the two firms to eventually reach agreement.

As Sharp's shares tumbled 11 percent, the biggest drop in two weeks, the Japanese TV maker played down the sudden departure of the mercurial Gou, who founded Hon Hai four decades ago as a maker of plastic parts for TVs.

The Taiwanese company's rapid rise as a major assembler of TVs, computers and phones including those of iPhone maker Apple Inc has made Gou one of Taiwan's richest people with an estimated worth of around $5 billion.

The two companies will resume talks as early as Friday, said a spokeswoman for Sharp, Miyuki Nakayama.

On Gou's apparent departure, she added: "That's nothing to do with the talks. It was his schedule."

The Taiwanese company had agreed to pay 67 billion yen ($854 million), or 550 yen a share, for 9.9 percent of Sharp in March, but reopened talks in August to seek a lower price after the LCD TV pioneer's stock slumped below 200 yen as mounting losses put a question mark over its future.

Gou has said that whether he takes a stake in Sharp, which takes its name from the ever-sharp mechanical pencil it invented a century ago, will depend on whether the Japanese firm will take his advice on how to restore profits.

Hon Hai shares were down 0.9 percent in Taipei trading in a broader market that rose 0.14 percent. (Reporting by Tim Kelly and Dominic Lau; Additional reporting by Sophie Knight and Faith Hung; Editing by Ryan Woo)