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Third seed Sindhu, a two-time Olympic medallist, lost 21-15 9-21 14-21 to world no 8 and second seeded Ratchanok in 54 minutes for her third semifinal finish on the trot.
The 26-year-old Sindhu had made it to the last four in Indonesia Masters last week and also at the French Open in October.
Sindhu, world no 7, came into the match with a 4-6 head-to-head count, having lost to the Thai player twice in the last two meetings.
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Sindhu grabbed three straight points to march ahead and didn’t look back as she pocketed the opening game.
Ratchanok got her bearings back and came back roaring into the match as she build up a lead of 11-7 at the interval in the second game.
The Thai shuttler grabbed nine of the next 10 points from 12-8 to leave Sindhu stranded at the other side. It was Sindhu who handed 11 game points to Ratchanok after going to the net and the Thailand shuttler sealed it with a smash on her opponent’s forehand. The world no 8 Thai continued her impressive run in the decider as she ran to a healthy 11-6 lead with Sindhu committing too many errors.
Sindhu resumed with a cross court drop but a misjudgement at the backline and then an error at the net meant Ratchanok continued to move ahead.
The Indian had a good run of four points as she reached 13-16 but Ratchanok once again snapped the run of points and moved to seven match points.
A net error delayed the inevitable as Ratchanok sealed the contest with a precise return at the forecourt.
Sindhu, the reigning world champion, last reached the finals at the Swiss Open.