There was little drama throughout much of what was a cagey first set, with both players trading holds of serve. Thiem was especially clinical in holding to love for 2-2 and 4-4, with deuce points elsewhere on the Austrian's serve providing the closest thing to any form of danger early on at the O2 Arena.
But Djokovic all of a sudden found himself facing break point at 5-5, with Thiem again proving clinical as he broke at the first time of asking. The US Open champion followed the break with an unopposed hold of serve to take the first set 7-5 after 53 minutes on court.
Djokovic responded well by holding to love in the first game of the second set, but there was more adversity for the world No 1 as he was forced to save break point at 2-2 before managing to hold. Thiem, meanwhile, was reeling off faultless service games until he was forced to fend off a break point for the first time in the match – and at the crucial juncture of 3-4.
The Austrian went on to hold, but Djokovic kept the pressure on with another hold to love. Another confident hold from the Serb left Thiem serving to stay in the set. And it was a nervy service game for last year's ATP Finals runner-up, who quickly went 15-40 down. But Thiem showed great resolve in saving both set points before holding to force a tiebreak.
He started the breaker brightly, gaining a 2-0 lead, but Djokovic cancelled out the Austrian's mini-break at once as he reeled off four straight points. Thiem in turn fought back, however, levelling at 4-4. And the Austrian sustained that momentum to gain match point, only to be denied by Djokovic as the tiebreak continued to ebb and flow.
The world No 3 earned a second match point as the set ticked past the hour mark, but again failed to convert, and moments later Djokovic was faced with a similar frustration as he wasted set point. But after saving a third and fourth match point, the Serb finally sealed the breaker 12-10 to send the semi-final to a deciding set.
With both competitors having exerted so much energy at the conclusion of the second set, each struggled to mount much resistance in their opponent's service games in the third. As such, the set followed serve until 6-5 as five-time ATP Finals champion Djokovic was left seeking a hold to stay in the competition. 'Nole' did just that, setting up another tiebreak to decide the semi-final.
And Djokovic, beaten by Thiem in the round-robin stage at the O2 Arena last year, called on his vast experience as he claimed the first three points of the breaker, only to see the Austrian claw his way back and into a 6-4 lead.
Djokovic, as he had done several times in the second set, saved match point, but the world No 1 was only delaying the inevitable, with Thiem ultimately closing out the tiebreak 7-5 to win the contest, end Djokovic's pursuit of a record-equalling sixth Finals title, and reach the final of the season-ending competition for the second year in a row.
Having spent just shy of three hours on court against Djokovic, Thiem – beaten by Stefanos Tsitsipas in last season's final – will on Sunday face the winner of the semi-final between Rafael Nadal and Daniil Medvedev.
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