Small color LCDs have been widely used in the mobile display market for the past couple of decades due to their cost effectiveness. In particular, 64K color LCDs have gained in popularity over true color LCDs due to their low power consumption and effective transmission. However, the 24-bit to 16-bit image data conversion (referred to as asymmetric data truncation) results in a colorization of the gray scale and lack of smoothness, such as pseudo edge artifacts. Thus, to solve these problems, this paper proposes and implements a simple truncation error compensation algorithm using a 1-bit lower data expansion with neighbor pixel information. In experiments, the implemented LCD driver IC is shown to correct these artifacts .