Watson will attempt to qualify for the Australian Open next week
Heather Watson's impressive run at the Auckland Classic came to an end with defeat by Shuai Peng in the last eight.
Watson, the British number three, was playing in her first WTA quarter-final after coming through qualifying, but went down 6-4 7-5.
The 18-year-old is projected to move up from her current ranking of 176 to inside the world's top 150 next week.
In other matches, top seed Maria Sharapova suffered a shock 6-2 7-5 defeat by Hungarian veteran Greta Arn.
The Russian made 30 unforced errors, three double-faults and hit only won clean winner as she lost in 91 minutes to the unseeded 31-year-old.
I'm like a little girl whose dream has come true
"I started off really slow, got down two breaks and I think she gained a tremendous amount of confidence from that," said Sharapova.
"I had my chances in the second set but I didn't play the same way I had played to get there. Obviously I would have loved to play a few more here and be the winner, but that's the way it goes. You look forward to the next one.
"That's the good thing about tennis."
Arn said: "I'm like a little girl whose dream has come true. If you ask a little girl what is your dream she would say to play Maria Sharapova."
The Hungarian goes on to face Germany's Julia Goerges, who defeated Kateryna Bondarenko 5-7 6-2 6-2.
Second seed and defending champion Yanina Wickmayer demolished Simona Halep of Romania 6-0 6-2.
"I feel very happy, this is the first week of the year and I'm really happy to be playing well," said the Belgian. "I'm in the semis so I guess this tournament is lucky for me."
Watson beat two top-100 players as she came through three matches in qualifying and two in the main draw before losing to Peng, and the Briton will now focus on trying to qualify for the Australian Open next week.
"Was my sixth match here and I was pretty tired but I still had chances," the Guernsey-born player wrote on her Facebook page.
"Had a good time in Auckland though and am happy with this week overall. Flying to Melbourne now and really excited for the Australian Open."