French Open champion Li Na, playing in her first event since pulling out of the Paris Indoor Open, exited the WTA Indian Wells event on Wednesday, losing to 6-4, 6-2 to Angelique Kerber.
China's Li, the first Asian player to win a Grand Slam title, suffered her first loss to Germany's Kerber in four career meetings. All three previous contests were in 2010.
"A lot can change in two years," said Li, the eighth seed. "My serve didn't work. The three times I played her before I was getting points on my serve but today was different."
Kerber next faces world number one Victoria Azarenka, who dismantled Agnieszka Radwanska of Poland 6-0, 6-2.
Azarenka extended her season-long win streak to 21 matches as she raced into the semis.
The 30-year-old Li, from Wuhan, started her year off by reaching the final in Sydney and made it to the fourth round of the Australian Open before pulling out of the Paris tournament last month with a back injury.
Li held serve just once in the final set as the 24-year-old Kerber won the final six games of their night match on centre court at the Indian Wells Tennis Garden.
Li said the turning point was the sixth game of the second set. Trailing 3-2, Li had a golden opportunity to break Kerber as the German fell behind 0-40 on her serve.
But Kerber battled back and went on to win the game with a service winner to Li's backhand.
"After that game she had a lot of confidence on the court," said Li, who was seeking her 400th career match win.
"I was a little bit surprised. She has unbelievable defence. Sometimes I think I can win the point, but she just tried to get the ball back all the time. All I can say is today was very tough for me."
Li, who missed a month with the back injury, won just nine of 22 points on her second serve.
Kerber won 65 percent of her first serve points and saved seven of nine break points in the 83 minute match in front of a crowd of about 2,500.
"I am happy I am in the semis now," Kerber said. "I just tried to move very good and hit the balls deep in the court and play aggressive."
Kerber has shown that she doesn't give up easily, surviving two match points in her opener against Sloane Stephens and three match points in her third-round victory over another American, Christina McHale.
Kerber, who is seeded 18th, is part of a wave of young Germans who have emerged on the WTA Tour and are steadily climbing up the rankings.
Azarenka has stormed through the last few rounds of the women's draw. Her toughest test was her opening match when she just scraped by Germany's Mona Barthel in three sets 6-4, 6-7 (4/7), 7-6 (8/6).
If Azarenka can win her semi against Kerber she would have 22 straight match victories. You would have to go back to Martina Hingis in 1997 to find someone with a longer win streak to start the WTA season. Hingis had 37 consecutive wins.
"I am really impressed with the way I played," said Azarenka, who clinched the victory over Radwanska on her first match point when Radwanska hammered a forehand into the net. "I didn't expect to win that way."
The 22-year-old from Belarus is chasing her first Indian Wells title after already having captured the Australian Open this year and the world number one ranking along with it.
If she makes it to the final she could face second seed Maria Sharapova who plays her quarter-final match on Thursday against fellow Russian Maria Kirilenko.
Azarenka thrashed Sharapova in the final of the Aussie Open, one of three titles for her this year.