For various drilling applications where the space in the tool head is limited, two motor topologies with the stator outsourced from the head are proposed, allowing for compact design and direct drive. In order to meet the high torque requirements at low speed and operate at high speed up to 200 000 rpm a finite element analysis (FEA) is carried out and the machine design is optimized for maximum torque while considering the space limitations and the loss constraints at the critical operating points. As an example, for the specifications of a high-speed micro-machining spindle covering a wide application range, FEA results are presented. Moreover, a torque ripple compensation method based on phase current profiles obtained from FEA is proposed to eliminate the torque ripple caused by the stator asymmetry and slotting. I.