He soldiered through to what would have been a 39th career meeting with Federer, but said he knew when he practiced Saturday morning that he wouldn't be able to play to an adequate standard.
Nadal's knee appeared to flare up in his quarter-final win over Khachanov on Friday, where he twice received treatment from his trainer, with the Spaniard stressing after the match he would need to assess the injury ahead of the match on Saturday.
Nadal, who has struggled with knee injuries throughout his stellar career, was the second high-profile player to withdraw from the tournament. "What I'm gonna do is go home and try to smoothly transition to clay and be 100 percent for the first event in Monte Carlo". After an uninspiring performance against unseeded German Philipp Kohlschreiber, world No. 1 Novak Djokovic parked his run in the third round and then turned his attention to doubles. Sometimes it's tough and it can be frustrating for me personally going through all this stuff.
To add some spice to this possible clash, both Roger and Rafa reached the final 4 after conceding no sets to their opponents.
"The only break point I had to save was in the last game, and that was what I wanted to do, to play my service games well and not let him have too many chances", Thiem said.More news: Elkhorn River Flood Warning
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Knee problems have dogged the 32-year-old Spaniard in recent years, and they cut short his 2018 season after the US Open in September.
Federer admitted he wants a do-over after last year's disappointing defeat in the finals at Indian Wells, and said he welcomed a day of rest. "Roger was playing great in the crucial moments".
While Nadal said he feels knee pain "almost always", in the face of this latest setback he insisted: "My goal doesn't change".
"You look back at what I did well there, but you can't just copy-paste and play exactly the same thing again", Federer said.