Ferrero brushed aside Thailand's Paradorn Srichaphan 6-4, 6-2, a result that will be enough to keep him on top of the world rankings, ahead of Andy Roddick and Federer, for at least another week.
Federer, seeded third in the 2.45 million euros indoor tournament, had to work harder to win against big-serving Spaniard Feliciano Lopez 4-6, 7-6, 6-4.
Federer, bidding for back-to-back titles following his success in Vienna last week, looked lethargic in the opening set and lost it to an early break in 40 minutes.
The Wimbledon champion looked to be heading out of the tournament when he went 0-40 down on his serve at 4-4 in the second but he held his nerve and went on to force a tiebreak, taking it 7-3 when Lopez double-faulted on set-point.
He then broke in the second game in the third set and that advantage proved enough to send him to victory in two hours 15 minutes.
The other semi-final will feature Morocco's Younes El Aynaoui, after his 3-6, 7-6, 6-2 success against Frenchman Sebastien Grosjean, and Chile's Nicolas Massu, who beat Juan Ignacio Chela of Argentina 6-7, 6-4, 6-4.
EASY WIN
Ferrero will have high hopes of making it through from the top half of the draw, after enjoying an easier than expected win against Paradorn.
The Spaniard was gifted a break when Paradorn double-faulted at 15-40 in game seven in the first set and he broke twice to take the second, the seventh seed blasting a return long on the second of three match-points.
The two matches in the bottom half of the draw were both as tight as the Federer-Lopez clash.
Grosjean hardly put a foot wrong over the first two sets against El Aynaoui, serving to devastating effect and dominating the points with his accurate groundstrokes.
The Frenchman set up two break-points in game six of the second but he failed to convert and that save from El Aynaoui signalled a shift in momentum.
El Aynaoui went on to force a tiebreak and moved confidently into a 6-3 lead. Grosjean saved those three set-points but, serving at 6-7, he missed a fourth as El Aynaoui stepped round to clatter a forehand winner.
El Aynaoui grew in stature over the third set and broke twice to secure victory.
"It was close but my serve helped me a lot," said the 32-year-old El Aynaoui. "I think my mental strength played a big part in it. It's a combination of good form and mental desire."
Massu, who beat Roddick in the third round on Thursday, came through another exhausting quarter-final with Chela, clinching victory as the Argentine smacked a backhand long on the first match-point to bring an end to a contest lasting two hours 57 minutes.
Defeats for Grosjean and Paradorn left the battle for the two remaining places in the Tennis Masters Cup in Houston at the end of the season finely poised.
Carlos Moya of Spain and Argentina's David Nalbandian occupy the crucial seventh and eighth spots in the ATP Champions Race, ahead of Mark Philippoussis, Grosjean and Paradorn with just two weeks of the regular Tour still to go.
