10bit is achieved using simulation techniques
Here's a quote from my guide
The billion/trillion color LCD marketing scheme:
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All consumer LCD displays are either 18bit (262.144 colors) or 24bit (16.7million colors) and none of them can actually display billion or trillion colors natively. This is where internal image processing, FRC and dithering come in.
A 6bit TN panel (commonly found in budget PC monitors and portable devices) can only display 262,144 colors (2^6 x 2^6 x 2^6 = 64 x 64 x 64 = 262.144). By using FRC (Frame Rate Control) and dithering, manufactures were able to simulate higher colors without physically altering the panel (e.g. 262K + FRC + dithering = 16.2 million). This exactly how 10bit color and 14bit monochrome display work by using a native 8bit panel.
HDTVs on the other hand use internal picture processing to simulate higher number of shades which ranges from 8bit to 14bit. The purpose of this chip is to smooth out gray scales from
this to
this, therefore by creating the elution of 10bit color on an 8bit panel.
Reference:
Answers.com Diamond-vision.com Hardware.fr (Translate to English using Google) HQV (An interactive way of leaning video technologies)