Britain’s Raducanu, who is continuing her comeback from an injury-hit 2023 season, lost 7-6 (7-2) 6-3 against the clay-court specialist from Poland.
Swiatek is on a 10-match winning run in Stuttgart, having won the last two editions of the WTA 500 tournament.
She will face Kazakhstan’s fourth seed Elena Rybakina next
Raducanu, 21, has enjoyed a return to form over the past week, helping Britain beat France in the Billie Jean King Cup at the weekend before wins against three-time major winner Angelique Kerber and Linda Noskova.
Her run to the quarter-finals in Stuttgart will see her rise up the world rankings after dropping to 303rd following wrist and ankle operations in 2023.
Asked if she thought Raducanu can return to the top level of the sport, Swiatek said: “I hope she will be able to do it because for sure she has the game for it.”
Raducanu enjoyed a dream start against Swiatek, 22, fighting back from 40-0 down to break the defending champion’s opening service game.
The four-time major winner broke back immediately and continued to threaten Raducanu’s serve throughout the first set, but the Briton held firm to force a tie-break.
Swiatek raced through the tie-break before striking the first blow in the second set on her way to a 3-1 lead as a tumble onto the clay floor seemed to momentarily dent Raducanu’s confidence.
The 2021 US Open champion regained her composure to divert three break points in the fifth game, but the single break of serve in the second set proved enough for Swiatek to wrap up the win after a gruelling two hours and four minutes on court.
“It was a pretty intense match so I am happy I was able to keep the intensity even though we played tough games for over two hours,” Swiatek said.
“It wasn’t easy, I had a lot of break points that I couldn’t convert.”