Abstract: A chip (12) counter (10) employs an ultrasonic distance measuring system (40) to determine the number of chips in a stack (54, 56) in a chip tray (16) channel (14). A computer (32) initially stores an average chip thickness (T) and receives distance data from the ultrasonic distance measuring system indicative of a first distance (D.sub.1) to the bottom of an empty channel. To count chips, the computer repeatedly receives data from the ultrasonic distance measuring system indicative of a second distance (D.sub.2) to the top of the stack of chips in the channel. The computer subtracts the second distance from the first distance to determine a height of the stack of chips and then divides the height by the average chip thickness to provide a continuous count of the number of chips in the channel. In a multichannel chip tray, each channel has a distance measuring transducer, and a multiplexer (28) scans all the transducers to provide the computer with second distance data for all channels in the chip tray.