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Axial flux permanent magnet (AFPM) machines are being increasingly used in a variety of industrial, direct drive applications which benefit from their extreme axial compactness. In particular, slotted AFPM machines are of great interest, since they allow to achieve high torque densities together with an adequate constant power speed range. This paper analyzes a particular aspect related to the design of such machines, i.e. the use of soft magnetic composite (SMC) wedges to close stator slots. Magnetic circuit-based analyses and 2-D and 3-D finite-element analyses are performed on a 10 kW AFPM machine; various magnetic wedge configurations are adopted; the no-load performance is compared with that of the same machine using nonmagnetic wedges in terms of flux linkage, cogging torque, and no-load losses. Finally, experimental tests and results on a full-scale prototype machine mounting magnetic wedges are reported.