Chip is a potato chip that made his only appearance in the episode "I Had an Accident." He is one of the three "friends" SpongeBob made after deciding to live inside. The others are Penny and Used Napkin.
Chip, as the name describes, is a yellow potato chip. His shape resembles that of a Pringle.
After SpongeBob decides to live indoors forever, SpongeBob chooses Chip as one of his new friends. SpongeBob throws Chip to the door to escort Sandy and Patrick out, somehow opening the door. Patrick thanks Chip before leaving. When SpongeBob goes outside to save Sandy and Patrick from the Gorilla, Gary then eats Chip, thus ending his "life."
Chip encouraged SpongeBob to save Patrick and Sandy, and later Gary "kills" Chip by eating him.