The 22-year-old Indian dished out a controlled game of badminton to outclass the Glasgow World Championship bronze medallist Chinese opponent 21-15 21-18 in a match that lasted a little less than an hour.
World No. 3 Sindhu thus emulated Saina Nehwal, who had reached the final in 2011 and mixed doubles pair of Jwala Gutta and V Diju, who had ended runners-up in 2009.
In the summit clash tomorrow, the World Championship silver medallist Indian will face World No. 2 Akane Yamaguchi of Japan, who saw off Thailand's Ratchanok Intanon 17-21 21-12 21-19 in another semifinal today.
Sindhu had thrashed Yamaguchi in straight games in her last Group A match yesterday.
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Playing an opponent with whom she has a 2-2 head-to-head record this season, Sindhu had to work hard during the rallies to stay a step ahead of the Chinese.
In the first game, Sindhu rode on the unforced errors of Chen, ranked eighth in the world, to quickly open up a 5-0 lead early on. Chen opened her account when Sindhu found the net and soon she drew parity with an accurate placement and superb return at the nets.
With Chen going wide, Sindhu broke the rhythm and then unleashed a magnificent down-the-line smash to claw her way back at 8-8. Sindhu grabbed a 10-8 lead when the Chinese hit the net and wide.
A long rally ensued which ended with Sindhu failing to reach for the shuttle at the forecourt.
Another accurate return at the baseline and it was Chen who had made it 10-10 but she sent the shuttle out again as Sindhu enjoyed a slender 11-10 lead at the break.
Chen defended a body smash from Sindhu but then again hit long as Sindhu grabbed five game points. The Indian sealed the game with an overhead return which Chen failed to reach.
After the change of sides, Chen produced some measured smashes to draw early lead but Sindhu unleashed a cross court smash after the Chinese tripped at the forecourt to draw parity at 2-2.
Sindhu added extra power to her returns, forcing her rival to commit errors. At 5-9, Chen pocketed a couple of points before a steep crosscourt return took Sindhu to 10-7. She entered the lemon break when Chen went wide again.
After the interval, Sindhu managed to extend the lead to 15-11 but she lost two video referrals after going long and wide. The duo engaged in another fierce rally which the Chinese closed out with a jump smash to draw parity at 15-15.
The Indian then grabbed three points, one being a lucky net chord to reach 19-16. Chen narrowed the gap after winning a long rally which left Sindhu exhausted.
The Indian found the net next but after a couple of unforced errors by the Chinese, Sindhu lifted her hands in the air in celebration.