Donald paid credit to his opponent, who played the front nine in six-under par, but described his own performance as "very average".
"Scott played very well, I played just very average," Donald told reporters.
"I need to drive it well around this course. There's a few forced carries out there and probably I didn't drive it well enough to put any pressure on Scott. But he was seven under through 12 and just playing extremely solid.
"I had a few opportunities on the greens, but for whatever reason I was just not making the putts and hence I'm going home."
Piercy will now play Steve Stricker in the last 16 in Tucson.