In a double boiler or metal bowl over hot water, melt milk chocolate in espresso; stir until smooth. Remove from the heat.
In a large bowl, beat butter and sugar until crumbly, about 2 minutes. Add 1 egg at a time, beating well after each addition. Beat in vanilla. Combine the flour, baking powder and salt; add to the creamed mixture alternately with milk, beating well after each addition. Stir in chocolate chips and reserved chocolate mixture.
Transfer to a greased and floured 10-in. fluted tube pan. Bake at 325° until a toothpick inserted near the center comes out clean, 80-90 minutes. Cool for 10 minutes before removing from pan to a wire rack to cool completely.
In a large bowl, cream butter until light and fluffy. Beat in the confectioners’ sugar, milk, vanilla and salt; frost cake.
