Teaching the practical aspects of device and chip design in New Zealand presents many problems, including high manufacturing costs, long lead times, and the lack of local industry strength. Nonetheless, it is possible to overcome these issues. This paper describes the courses in these areas at the University of Canterbury, including a practical IC design project that has been running successfully for the past four years. The IC design project takes final year students through a full custom design using modern design tools and fabrication processes. The design is quite straightforward — a 4-bit arithmetic logic unit — but it emphasises the importance of design, simulation and testing. The final circuits contain a few hundred transistors, so good practice is essential. Twelve designs are integrated on to a single chip to keep costs down, and individual designs are addressed via multiplexers. The designs are fabricated using a 0.5 micron process, accessed through a multi-project vendor (MOSIS). Getting chips back from a manufacturer is significantly more motivating for the students than just performing a paper design.