In compact cameras that use a built-in ND option, it’s typically a simple physical neutral density filter that slides in and out of the optical path. It is not usually an electronic LCD-style panel.

Because the filter has a fixed light reduction, these cameras often offer only a limited number of aperture/light-transmission choices at a given focal length—commonly just two settings, or more if the camera uses multiple fixed ND stages. In other words, the camera isn’t continuously varying the attenuation the way an adjustable iris would; it’s switching a fixed ND filter in or out.