In recent years, the transparent waveguide liquid crystal display (WLCD) technology attracted a lot of attention for the high transmittance. To further improve the display performance, the contrast ratio was systematically optimized in this work. A coarse‐grained model based on Mie scattering was established to perform the limiting theoretical analysis of the contrast ratio of polymer‐stabilized liquid crystal devices. To improve the contrast ratio, we tried different material formulations and optimized the UV polymerization process, and also applied light shielding layer to suppress metal lines reflection. Finally, the contrast ratio can reach to 18:1. With these improvements and the advantage on transmittance, it is believed that the WLCD technology will be applied in various intelligent IoT systems in the near future.