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The 36-year-old lost 6-3, 6-3 to Germany's Angelique Kerber - putting on hold her bid to match Margaret Court's Grand Slam haul.
Seven-time champion Serena had been bidding to claim a record-equalling 24th Grand Slam crown but made too many errors as Kerber ran out a comfortable winner.
Novak Djokovic reached his fifth Wimbledon final as he resisted everything great rival Rafael Nadal could throw at him to win 6-4 3-6 7-6(9) 3-6 10-8 in a two-day classic.
Serena Williams was back in a Grand Slam final just 10 months after giving birth to her daughter Alexis Olympia.
Angelique Kerber will face either seven-times champion Serena Williams or fellow German Julia Georges in the final.
Jelena Ostapenko became the first Latvian to reach the Wimbledon singles semifinals after she subdued Slovakia's Dominika Cibulkova 7-5, 6-4.
Two-time former champion Petra Kvitova slumped out of Wimbledon in the first round, beaten by inspired world No. 50 Aliaksandra Sasnovich.