Canyon Machine is a friendly machine located on the Forest. When prompted for the first time she aks for a painless death thinking the androids were sent to kill her, if the player chooses to spare her life, she will give you the side quest Lord of the Valley. After clearing the quest she starts selling and fusing Chips. Canyon Machine can fuse chips up to +8.
Go to Forest: Center access point, and head down river and follow it until it drops off a long cliff. Find a place to drop down onto a safe ledge, then continue all the way down past a locked chest.