Also, defending champion Julia Goerges saved a match point in the third set before beating Eugenie Bouchard 3-6, 6-3, 7-6 (6). Starting off the new tennis season, Andreescu has made diversifying her game a priority.
A day after knocking out world No 3 Caroline Wozniacki of Denmark, 18-year-old Andreescu put on another stunning display to oust 2015 Auckland champion Williams.
Williams, who had been a professional for six years before Andreescu was born, took the first set and broke Andreescu at the start of the second. "But for me it was always harder to hit against people like her because I don't really know what's coming next", said Osaka.
"I think it's really important to me to just stay in the present moment and I think I've been doing that this whole week and I'm beyond grateful right now".
Rain meant no matches were completed at the Shenzhen Open, with Veronika Kudermetova a set up against Vera Zvonareva and Sorana Cirstea 2-0 ahead in the first set of her clash with Alison Riske before play was suspended. Andreescu had to earn her way into the ASB Classic by winning the qualifiers. "She's one of the best servers in the game".
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Standing in the way of Goerges and a second straight Auckland crown is giant-killer Andreescu. "She played some terrific tennis, different from a lot of players on the tour and I'm sure we're going to hear a lot more of her".
"It's the biggest part I've learned in the last two or three years when I got up the rankings", Goerges said.
Goerges clinched the second set in 45 minutes with a pivotal break in the 11th game, then took the deciding third set in only 23 minutes as Andreescu exhausted in her eighth match at the tournament.
Bouchard did win a doubles semifinal on Friday, teaming with American Sofia Kenin to beat No. 4 seeds China's Xinyun Han and Croatia's Darija Jurak 6-7 (5), 6-4, 10-8.