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Underneath the top layer of the LCD, we find a series of films and sheets that manipulate light before sending it to the user's eye.
Warning, the explanation we're about to give is painfully abridged. If you want an easy-to-understand take on how LCDs work, check out "Bill The Engineer Guy's" teardown of an LCD monitor.
Diffuser and prism films evenly spread the light to create an even backlight for the display panel. A stationary polarizing sheet then works in conjunction with the liquid crystals to block or allow light for each pixel, all 5+ million of them.
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