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The two-time Olympic medallist displayed her immaculate retrieving skills and exemplary net play to outshine Katethong.
Sindhu, seeded seventh, squandered a game lead to lose 13-21, 21-15, 21-13 to the second seed Tai Tzu for the sixth time in row.
It was the world No 6 Zii Jia's second title on the trot after winning the Asian crown in Manila earlier this month.
Srikanth and Sen will face each other in the first semifinal on Saturday. P V Sindhu and H S Prannoy fell in the quarterfinals.
Competing in her third Olympics, Tai Tzu finally stood atop the podium, finishing with a silver medal after going down to Chen Yu Fei of China 18-21, 21-19, 18-21 in the final.
Sindhu and Srikanth fought their hearts out before suffering close defeats.
Tai Tzu-ying outplayed Saina Nehwal 21-13,13-21 , 21-6 in the final.
Sixth seed He pulled off a hard-fought 21-18, 7-21, 21-13 win over the top seed to set up a semifinal date with Olympic champion Carolina Marin of Spain.
Tai Tzu-ying beat Sindhu 21-16, 21-16 in the quarterfinal, while Saina was no match for Carolina Marin.
Former world no 1 Tai Tzu, playing in her fourth straight All England final, overcame top-seeded Chinese Chen Yu Fei 21-19, 21-15 to claim her third title at the prestigious tournament.
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