01 - Melt butter in a large skillet over medium heat. Add chopped onions, salt, pepper, and sugar. Cook, stirring frequently, until onions are golden brown and caramelized, about 15–18 minutes. Remove from heat and let cool completely.
02 - In a mixing bowl, combine sour cream, mayonnaise, garlic powder, onion powder, and chives. Stir in the cooled caramelized onions. Cover and refrigerate for at least 30 minutes to allow flavors to meld.
03 - Wash and peel potatoes. Using a mandoline or sharp knife, slice potatoes very thinly (about 1/16 inch). Rinse slices in cold water to remove excess starch, then pat dry thoroughly with paper towels.
04 - Heat oil in a large, deep pot to 350°F. Fry potato slices in batches until golden and crisp, about 2–3 minutes per batch. Remove with a slotted spoon and drain on paper towels. While warm, season chips with salt and black pepper.
05 - Transfer the onion dip to a serving bowl, garnish with extra chives if desired. Serve alongside the freshly made potato chips.