Enterprises can choose among different capital adjusting approach that fits their own status and the prospects of industries. This case study examines the 2009 capital reduction event by Nanya Technology, a worldwide famous DRAM manufacturer. Since year 2007, the decreasing revenue resulted in significant accumulated losses on its balance sheet. In response, Nanya's board of directors decided to reduce $31.18 billion in capital (or 66.43% of its capital) to offset the reported accumulated losses. We present a case study of Nanya to explore the task of its capital reduction decision. From the case teaching point of view, we discuss the industrial background and its financial status to enhance students understanding of the legal aspects and institutions for firm's capital reduction. We also examine the stock market reaction accompanying Nanya's announcement as well as the stock price behavior subsequent to its recapitalization. The empirical findings show that the negative announcement effects only lasted for three days and analysts made positive recommendation after Nanya's recapitalization. These phenomena show the positive impact on the stability of Nanya's operating and financing, as well as to its enhancing the corporate value via capital reduction and raising new capital after capital adjustment.