By Paul Arnett
Tseng, who closed with a four-under 68 for a total of 13-under 275 to pip Pettersen was in the middle of her champion's media conference when the effects of a 6.9 earthquake in Baja was felt throughout southern California.
"We have a lot in Taiwan, but this was big. It's like my big week."
Tseng began the final round tied for second with Pettersen and an eagle at the par-five second and a birdie at the par-four third propelled the 21-year-old to the top of the leaderboard. As Tseng watched on nervously, Pettersen piled on the pressure and was unlucky to miss an eagle chip at the par-five closing hole.
The Norwegian could only sink a birdie to close on 276.
"Geez, that was a big chip," Tseng said. "I was scared to look and when I looked back, I saw the ball just past the hole. I'm happy that missed."
South Korea's Kim Song-hee closed with two-under 70 to take third at nine-under 279. World number one Lorena Ochoa was fourth on six-under 282 with third round leader Karen Stupples of Britain tied for fifth after she closed with a six-over 78.
Tseng had held a four-shot lead at one stage but played conservatively down the stretch, parring her final six holes after a bogey-five at the 12th.
Pettersen moved steadily into contention with three birdies on the back nine, reducing Tseng's lead on the par-five 18th to two shots.
Tseng sent her drive on the final hole into the primary cut of rough just off the right side of the fairway. Pettersen blasted her drive down the middle, allowing her to go for the green in two.
Tseng laid up, but hit her third shot on the green, 12 feet below the hole, setting up the dramatic finish.
Pettersen thought her shot just might fall, settling for a tap-in birdie, giving Tseng two shots to win.
Her birdie putt came up short, but the tap-in par gave the 21-year-old her second major championship and third win on the LPGA Tour.
"I played very solid today," Tseng said. "I had an eagle on the second hole and I know today is going to be my day.
"I just kept telling myself commit to the shot and keep my tempo right, and just keep smiling all 18 holes no matter how I play." (Editing by Pritha Sarkar and Greg Stutchbury)