But was in devastating form on Friday, hitting 10 180s, a 12 darter and six 80-plus finishes including a 121.
Waites, 32, finally managed to respond in the fifth set to keep his hopes alive going into the break.
He reduced the deficit to 4-2 when the players returned and really began to find his form - and finishes - as he made it 4-3.
Waites was now on fire as he steamrollered Phillips 3-0 in the eighth set to level the match.
A 76 finish against the throw saw Phillips win the first leg of the decider, and after Waites missed two attempts for double 16, he nailed a 99 checkout to lead it 2-0.
Phillips maintained his momentum in the next as he produced a match-winning 86 finish, completed on double 16, to reach the semis for the first time.
Video - Wolfie's win gets crowd howling
Afterwards he said: "I started well but I knew Scott was a heavy scorer and big finisher so I had to hit him hard and quickly.
"When we got to the break I thought it was going to be another Ted Hankey match. He kept coming back at me.
"I knew I just had to grind it out in the second half, just keep plodding on. The 99 finish was the killer."
Adams, contesting his 17th BDO world championship, won the opening set against Thompson but was pegged back to 1-1 by the Yorkshire skipper.
However, 'Wolfie' proved to be in dominant form as he won the third set 3-0 and added six of the next seven legs to lead 4-1 at the break.
Thompson fought back, taking the sixth set 3-2 with an 86 checkout, but England captain Adams sealed victory in the next to set up a meeting with Phillips.
"I've not played Martin on the world stage before so it will be interesting," he said. "I have the utmost respect for a player who has made 100 appearances for his country."
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