Samsung Electronics has pulled back on its light emitting diode business in Japan, a Samsung official confirmed on Monday.

Factors behind the pull-out were difficulties in breaking into Japan’s electronics distribution network and industrial LED standards turning favorable to local companies, an industry source said. Yen depreciation also weakened the competitiveness of Korean goods.

Samsung officials confirmed the withdrawal in a phone interview, saying “the company plans to focus more on bigger markets including the United States.”

Recently, Samsung Electronics shifted its household LED-lighting business from the Device Solution division to the Consumer Electronics division, which has no distribution network in Japan.

Though industrial LED lighting still remains in the Device Solution division, Samsung also plans to reduce that business as well as maintenance services in the Japanese market.

“Samsung’s technologies do not match the LED standards that the Japanese government is now pushing ahead with,” said an industry source.

Speculation has been high that Samsung will ultimately close down its entire LED business after it sold 30 percent of its shares in Samsung Sumitomo LED Materials to Japan’s Sumitomo Chemical early this month. SSLM has seen deficits since 2011.

Samsung’s LED business is expected to post around 1 trillion won ($940 million) in sales this year, the lowest among the group’s parts division. Its sales have drop consistently from 1.31 trillion won in 2010 to 1.3 trillion won in 2012.

By Shin Ji-hye (shinjh@heraldcorp.com)