PV Sindhu loses to Sung Ji Hyun in a neck to neck competition played between the two.
But Sindhu didn't let it slip away and staged a fine comeback to make it 7-7 before taking the lead briefly.
Sindhu stayed calm and took the second game 21-13 to book a place in the last four.
In a tight match, Sindhu was second best as Sung displayed a mix of controlled aggression and defensive play to get the better of the Rio Olympic silver medallist.
Sung took an early 1-4 lead in the decider and extended it to 3-8 thanks to Sindhu's stream of errors.
Sindhu replied strongly in the second game, and was the pace-setter throughout. She leads 3-2. The first game was all but over when, at 15-14, Sung went on a four-point spree to put the Indian on the back foot. But Sung turned the game around by erasing Sindhu's three-point advantage to draw par at 9-9. With the game finally in sight, Sindhu pounced on a bad return from Sung to unleash a forecourt smash and followed it up with a shriek and a fistpump.
Carolina again stood at a two-point lead at 10-8 but soon Sindhu equalised at 11-point mark. The Korean opened up a three-point lead, with her play at the net being a standout feature. After committing initial faults, Sindhu did everything right by sending well-placed smashes only to see Sung somehow send back all of them to go up 5-9.
For her it was a matter of playing for her pride and for Sindhu, it was more than a matter of moving past an opponent who had a 5-3 head-to-head advantage coming into the contest.
Carolina ended up earning only 13 points till the end, as the Indian, with her childhood and national head coach Pullela Gopichand urging her on, overcame a big barrier.
Earlier in the day, China's Sun Yu went through unbeaten into the semifinal after rallying from a game down to beat the pint-sized Japanese Akane Yamaguchi 15-21, 21-10, 21-10 in a little over an hour.
After mind-blowing performances in the last two qualifying tournaments, ace Indian shuttler PV Sindhu had made it to the World Super Series Finals, being the first Indian to qualify for the tournament across all five formats of the game.