NCN Forum

This chip can accomplish three tasks:

Aperture control from the camera Instead of setting the aperture via the aperture ring, the chip communicates enough information (maximum aperture) for the camera to accurately meter. The D3x00 and D5x00 bodies, in particular, cannot perform stop-down metering without this information and would not meter accurately without it.

Autofocus confirmation Even though the lens is manual focus only, with the chip communicating information to the camera body, the green dot in the viewfinder will light up when focus is achieved at a designated AF point. This can be very useful without the viewfinder feedback we used to have in old manual focus film SLRs, such as the prism collar and split circle, but is not as accurate.

Partial EXIF information The chip can also supply some of the lens's EXIF information that would otherwise be missing without any electronic communication: such as maximum aperture and focal length. I do not believe it reports the aperture setting used, though.