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While the known modulation strategies for matrix converters are based on pulsewidth modulation (PWM)-or vector modulation-this paper presents a novel time-discrete modulation method based on real-time prediction calculation to select the switching states. The decision about which switching state is to be set for the following sampling period is made by the use of a predictive quality function. Using this approach, unity displacement factor is seen at the supply side with minimum line current distortion while the load currents follow their reference values with good accuracy. The quality function is derived from a mathematical model of the matrix converter and the controlled system. Measurements taken on a model plant, consisting of a matrix converter and a standard induction machine with a rated output power of 11 kW, show that the matrix converter, equipped with the control method presented here, offers advantages over systems with conventional frequency converters, especially in terms of the input current distortion.