An LCD that can show colors must have three subpixels with red, green and blue color filters to create each color pixel.

Through the careful control and variation of the voltage applied, the intensity of each subpixel can range over 256 shades. Combining the subpixels produces a possible palette of 16.8 million colors (256 shades of red x 256 shades of green x 256 shades of blue), as shown below. These color displays take an enormous number of transistors. For example, a typical laptop computer supports resolutions up to 1,024x768. If we multiply 1,024 columns by 768 rows by 3 subpixels, we get 2,359,296 transistors etched onto the glass! If there is a problem with any of these transistors, it creates a "bad pixel" on the display. Most active matrix displays have a few bad pixels scattered across the screen.

LCD technology is constantly evolving. LCDs today employ several variations of liquid crystal technology, including super twisted nematics (STN), dual scan twisted nematics (DSTN), ferroelectric liquid crystal (FLC) and surface stabilized ferroelectric liquid crystal (SSFLC).

Display size is limited by the quality-control problems faced by manufacturers. Simply put, to increase display size, manufacturers must add more pixels and transistors. As they increase the number of pixels and transistors, they also increase the chance of including a bad transistor in a display. Manufacturers of existing large LCDs often reject about 40 percent of the panels that come off the assembly line. The level of rejection directly affects LCD price since the sales of the good LCDs must cover the cost of manufacturing both the good and bad ones. Only advances in manufacturing can lead to affordable displays in bigger sizes.

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