Nishikori's 6-2, 6-2 victory denied Cilic an opportunity to win back-to-back ATP World Tour titles. Cilic claimed his ninth career title two weeks ago in Zagreb, Croatia, and had won nine of 11 matches this year.
Nishikori's next opponent will be Australia's Marinko Matosevic who had a 6-7(6), 6-3, 6-4 win over No. 7 seed Alexandr Dolgopolov.
Feliciano Lopez of Spain beat American Jack Sock 6-4, 6-3 and next plays Denis Istomin of Uzbekistan, a 6-4, 7-6 (5) winner over American Michael Russell.
Nishikori, the fifth seed, reached his second semifinal of the year. He opened the year reaching the same round in Brisbane.
"It was a perfect match for me," Nishikori said. "Everything went well, my serves and my groundstrokes."
Nishikori played nearly flawless tennis after breaking Cilic to go up 3-2 in the first set. He broke Cilic twice in the second set to take a 4-1 lead and did not face a break point. Nishikori smashed a forehand winner on match point.
"I was struggling on my service games and not putting enough first serves on the court," Cilic said. "It's one of the crucial parts of my game and today it wasn't working."
Lopez watched some YouTube videos of Sock to prepare for his first meeting with the 20-year-old.
Lopez served up seven aces and saved four of five break points against the American. Sock was up 2-0 and 40-0 in the second set before losing five straight points. Lopez broke Sock again to go up 4-3, held serve and then broke the American again to advance.
"It gave me a lot of confidence," Lopez said of breaking Sock in that third game.
Istomin improved to 3-1 against Russell in four career matches, but the 34-year-old American provided a stiff challenge in a match that took 1 hour, 37 minutes.
Istomin served up eight aces and broke Russell five times. Istomin grabbed a 4-1 lead in the tiebreaker before Russell closed to 6-5, only to hit a forehand long on the final point.
In women's play, Marina Erakovic of New Zealand defeated Stefanie Voegele of Switzerland, 6-2, 6-4 to return to the finals of the U.S. National Indoor Championships.
Erakovic, the world's 71st ranked player, will play German Sabine Lisicki on Saturday for the championship. Lisicki, ranked 40th, beat No. 7 seed Magdalena Rybarikova of Slovakia, 7-5, 7-5.
Erakovic is seeking the first WTA title of her career after reaching two finals, last year in Memphis and 2011 in Quebec.
Lisicki, the No. 3 seed, is playing in Memphis for the first time since 2009 when she reached the quarterfinals.
The Erakovic-Lisicki match will mark the final women's tournament held in Memphis. The event, which moved to Memphis in 2002, is moving to Rio de Janeiro in 2013.