Melt butter in a large deep skillet or Dutch oven over medium; add onions and sugar. Cook 20-25 minutes until deep golden brown and caramelized, stirring occasionally.

Add broth, water, thyme, salt, and pepper; increase heat to high and boil.

Stir in pasta; reduce heat to medium-high. Cook uncovered 12-15 minutes until tender and most liquid absorbed, stirring frequently.

Remove from heat; stir in 1 cup Gruyère until melted. Serve immediately topped with remaining cheese.