The 46-year-old world champion dispatched UK Championship winner Zhao 6-1, having earlier seen off Robert Milkins 4-2 to reach the quarter-finals in Bolton.
Zhao had made the last eight by beating women's world champion Mink Nutcharut by the same scoreline.
O'Sullivan will face Fan Zhengyi in Saturday's final-four showdown, with the Chinese player having won the only previous meeting between the pair to lift the European Masters title in February.
The Rocket was always in control against Zhao and made a clearance of 135 in the third frame to hammer home his advantage before adding the fourth.
Zhao hit 92 to pull it back to 4-1, but O'Sullivan remained in charge as he raced to a 6-1 victory. Judd Trump and Mark Selby compete in the first semi-final on Friday.