Home top seed Michelle Li was knocked out of the Badminton World Federation Canada Open in the second round in Calgary.
Li, who won the Commonwealth Games gold medal in Glasgow in 2014, faced a tough test against China's London 2012 Olympic champion Li Xuerui.
The Chinese player had to come through qualifying and won in three games, 21-15, 13-21, 21-10 at the Canadian Winter Sport Institute.
It continues her good form in North America after she won the US Open last week.
She is recovering from a huge injury lay-off after the Rio 2016 Olympic Games.
Japan's second seed Sayaka Takahashi is safely through to the quarter finals after a 21-6, 21-9 win over Denmark's Julie Dawall Jakobsen.
There will be Canadian interest in the last eight as seventh seed Rachel Honderich dispatched Japan's Ayumi Mine 21-16, 21-17.
Third round action took place in the men's competition with Dutch second seed Mark Caljouw exiting the competition.
He lost 21-10, 22-20 to China's Lu Guangzu who progresses to the last eight.
England's eighth-ranked Toby Penty is now the only seed left in after a 21-17, 21-13 win against Japan's Takuma Obayashi.
Former world junior team champion Zhao Junpeng of China also went through after he beat Thailand's Sitthikom Thammasin 21-15, 21-16.
The tournament continues tomorrow.