I prefer #1 because I think of chips as being things that can be counted. However, there is no right or wrong answer. There is no strict division in the English language between countable and uncountable nouns. Nobody can tell you to which catagory "chips" belongs because nobody can control the way you yourself think about "chips". If you think of them as things that can be counted, that is fine. If you think of them as a category of food, something that cannot be counted, that is fine too. The only important thing is that you speak in a way that is consistent with the way that YOU think about the noun.

I disagree with the others. Chips are totally countable, even though we may not count them most of the time. I definitely do eat too many chips in reality, and I say MANY. So - maybe either way is ok. I'm US English - don't know if that matters. For that matter, most people would say 'too many clothes.' as well.

CHIPS so too many. Because when there is the letter S at the end of a word, it is considered COUNTABLE thus you need to say TOO MANY chips.

"I ate too many chips" is correct. Chips are countable, so we need to use the word "many" here - you can't say that you ate "too much of them". "Too much" is used for uncountable nouns. For example, "I drank too much juice".

chips, like clothes, uncountable pl so = much chips