JOIN USFerrer storms into title round
Ferrer, the 13th seed, knocked out world number five Andy Murray on his way to the last four but he looked outgunned by his in-form opponent early on.
Sixth seed Verdasco, who had beaten Ferrer en route to winning last week's Barcelona Open, produced some glorious shots to race 5-1 ahead.
But his concentration snapped and he threw away the commanding position, losing the next eight games to go a set and 2-0 down in the second.
Verdasco, who needed over three hours to oust world number two Novak Djokovic on Friday, staged a brief comeback, breaking Ferrer after being jeered by the crowd for his wild shots.
Leander Paes and Lukas Dlouhy crashed out after being handed a straight-set defeat by the seventh seeded Polish-Austrian pair of Lukasz Kubot and Oliver Marach in the quarterfinals. The Indo-Czech combination went down 3-6, 4-6 in 76 minutes.
Justine Henin continued her impressive return to tennis when she fought back to beat former world number one Jelena Jankovic 3-6, 7-6, 6-3 in Stuttgart on Friday, leaving her opponent exasperated.
Australia's Samantha Stosur also went through to the semifinals with a 6-3, 6-3 win over China's Li Na.