Melt sugar and butter together in a saucepan over medium heat. Heat, stirring frequently, to 310 degrees F (155 degrees C), or until a small amount of syrup dropped into cold water forms hard, brittle threads. Remove from heat.
Stir 3/4 of the coconut into the butter mixture. Spread butter-coconut mixture into the prepared baking sheet. Sprinkle chocolate chips over the top. When the chocolate chips melt, spread the chocolate over the top and sprinkle with remaining coconut. Cool completely before breaking into pieces.
