"My foot was already wrapped, but very quickly I started to feel a blister was coming. I'd rather prevent than having the problem after.
"I've had tougher matches under the heat previous years in Australian Open, today was hot, but I don't think was the hottest day."
Muguruza came from 2-5 down in the opening set but ended up losing it in a tiebreaker. In the second, she saved a match point to hold for 4-5 but was beaten a game later as Hsieh put a backhand winner out of reach in the far corner.
The demanding conditions proved too much for another seeded player. British No. 9 Johanna Konta, a 2016 semifinalist, lost 6-4, 7-5 to 123rd-ranked Croatian-born Bernarda Pera of the U.S.
Maria Sharapova went through in straight sets to reach the third round with a defeat of Latvian 14th seed Anastasija Sevastova 6-1, 7-6 (7-4).
The Russian worked for 80 minutes on Rod Laver Arena to secure victory, saving herself from a third set with a winning tiebreak effort to close out the match.
French eighth seed Caroline Garcia advanced past Czech Marketa Vondrousova 6-7 (3-7), 6-2, 8-6 while Agnieszka Radwanska beat Lesia Tsurenko 2-6, 7-5, 6-3 and Barbora Strycova stopped Spain's Lara Arruabarrena 6-3, 6-4.
2016 winner Angelique Kerber continued her fast start to 2018, winning her 11th match since the start of the year over Donna Vekic 6-4, 6-1.
U.S. Open finalist Madison Keys took her post-New York record to 2-2 as she put out Russian Ekaterina Alexandrova 6-0, 6-1.
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