The 21-year-old from Guntur, who had beaten the five-time World Champion from China in the 2014 China Open final, suffered a 6-21 21-11 18-21 loss against the World No. 3 Chinese in a nerve-wrecking match that lasted for an hour and four minutes.
Lin Dan will now take on his long-time rival and two-time Olympic silver medallist Lee Chong Wei of Malaysia in a mouth-watering semifinal clash. The top seed beat sixth seed Chou Tien Chen of Chinese Taipei 21-9 21-15.
A former World No. 3, Srikanth seemed nervous early on and was totally outclassed in the lop-sided opening game which lasted just 16 minutes.
Srikanth struggled with his net play early on to allow Lin Dan lead 4-1 in the first game. The left-handed Chinese continued to dominate with his controlled stroke play as he engaged in long rallies with the Indian to lead 10-1 after winning a video referral. With Srikanth once again hitting long, Lin Dan entered the interval at 11-1.
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There was a visible change in Srikanth's demeanour in the second game as he raced to a 6-3 lead. His strokes got better as he caught the celebrated Chinese off guard a few times with his angled returns and held a six-point advantage at the interval.
Srikanth tried to engage Lin Dan in long rallies with some deep corner returns and then came up with some sublime winners to lead 15-8. The Indian missed a video referral to allow Lin Dan a point but his forehand smash found Lin Dan napping next. The Chinese again hit long as Srikanth led 17-9.
In the decider, six-time All England champion, Lin Dan opened up a slender 2-0 lead but Srikanth managed to narrow it down to 3-4 before a superb rally ended with the Chinese stamping his authority to lead 5-3.
Srikanth continued to stretch his more experienced rival and drew parity at 6-6 when Lin failed to lift a shot at the net. The Indian played some extraordinary strokes to bamboozle the Chinese.
The Indian grabbed a slender lead for the first time at 9-8 when Lin Dan hit long and entered the break with a 11-8 advantage after producing a powerful smash which grounded the Chinese.
A couple of unforced errors shifted the momentum to Lin Dan's favour as he led 16-14. The Chinese netted one return but his disguised net shot caught Srikanth offcourt. A smash gave a point to the Indian, who pumped himself up after winning every point.
However, the sheer quality of his strokes helped Lin Dan lead 19-16 but Srikanth managed to breath down his neck with another superb smash before a rushing shot got buried at the nets and gave the match point to the Chinese.
Srikanth said a smash into the net when he conceded a match-point to Lin Dan proved to be the difference.
"At that crucial stage I don't think experience really matters. I should not have done a few mistakes. The smash into the net at 17-19 was the most crucial point. It would have made 18-19 and an upperhand for me. Giving him 20-17 in the third game was quite crucial," Srikanth said at the Riocentro Pavilion 4.
Having won against the five-time world champion in the Thaihot China Open final in 2014, the Indian world number 11 had a 1-2 win-loss record against him.
Srikanth said his strategy was to stay alive by staying aggressive.
"We just wanted to give our best in the second game. We did not want to lose badly. I wanted to be as aggressive as I can. Just try out," he said about his discussion with national coach Pullela Gopichand during the match.
On the long rallies, Srikanth said: "The reason was not any special strategy against him. We just wanted to be as aggressive as I can. Not to do any simple mistakes like I did in the first game. Overall, it was more of to stay in the rally. Not to give up at any stage."
"I was never unhappy with the way I was playing. I was always playing really well. It's just that I could not win. I could not finish off matches well. Coming here, I really got a very good two months' of break," he said.
"I really got some good training. I really played well here I feel. It's just that I could not finish off the match my way. Actually I was dominating and playing really well.