Tseng, ranked No. 1 in the world and the overwhelming dominant figure in her sport, shot her second straight 68 at the first major tournament on the LPGA schedule this season.
Her 8-under 136 total put her a stroke in front of Haeji Kang, who also shot a 68 at the Mission Hills Country Club.
First-round leader Amy Yang slipped to a 2-over 74 and her 140 total left her in a tie for eighth.
Tseng won this tournament two years ago and led going into the final round last season before falling victim to a rally by Stacy Lewis. Tseng won seven events in 2011 to take a stranglehold on the No. 1 ranking -- two of those victories coming in major tournaments.
It took a score of 148 to make the 36-hole cut and among those missing it was Michelle Wie. She had rounds of 73-77.
Notable deaths of 2014 [PHOTOS]