Advanced Micro Devices said it expects its chip design business, the backbone of the company, to be profitable next year, adding more fuel to hopes that the technology sector is rebounding.

AMD executives, speaking to analysts, investors and media during an event at its headquarters on Wednesday, also sought to address concerns about the company's heavy debt load.

We're going to turn into a cash flow generating machine, said Chief Executive Dirk Meyer after discussing some of the company's upcoming chip designs. I can already hear the cash registers starting to ring, which is wonderful.

The company said that ideally it will keep $1 billion of cash on hand and that the rest will be used to pay down debt.

In spinning off Globalfoundries, its semiconductor manufacturer, and purchasing graphics chips specialist ATI, the chip company's reported debt ballooned to roughly $3.9 billion a year ago, according to Thomson Reuters I/B/E/S.

In its third-quarter earnings release, the company said it had reduced its debt to just under $3.2 billion.

Chief Financial Officer Thomas Seifert on Wednesday said that the debt issue is as high on list of priorities as it can be.

The perennial No. 2 to Intel, AMD has steadily bled market share in past years, and was hit hard by the slowdown in technology spending. But Meyer told analysts that its core business, designing chips, would once again turn a profit in 2010.

He also said that the market for both microprocessors and graphics chips should grow between 10 and 15 percent in 2010, an indication that spending on technology should pick up, thanks in part to demand from consumers.

The company forecast that 300 million PCs would likely be sold next year, with 180 million of those bought by consumers. Meyer said that trend is causing AMD to focus on graphics to deliver a better user experience.

Our market is being driven by consumers, and that's what's driving the technology, he said. Increasingly, people aren't going to be satisfied showing up to work and having a lousier experience on their computer than they do at home.

Shares of AMD rose 3 percent, or 16 cents, to $5.30 on the New York Stock Exchange.

(Reporting by Ian Sherr, writing by Paul Thomasch)