COE (Color on Encapsulation) technology is a new technology that uses CF (color films) and BM (black matrix) structures to replace the polarizer. It has the advantages of low power consumption and the thin film layer, and is an emerging technology in the field of OLED displays. Due to the high transmittance of CF and the fact that OLED film pattern structure, COE technology has the disadvantage of the obvious reflection diffraction. Based on the finite difference time domain method, the paper studies the film factors of OLED, and summarizes the main factors that affect diffraction. According to the simulation results, the diffraction phenomenon of COE technology was significantly improved by optimizing the OLED film layer parameters.