As Tomas Berdych finally ended his Rod Laver Arena jinx with a four-sets win over David Ferrer, Li looked odds-on to reach a third Melbourne final after tearing past fellow veteran Pennetta.
The Chinese world number four pummelled winners past the Italian as she broke five times and won 62 points to just 37 for her opponent in the 6-2, 6-2 victory.
Li, seeking her second Grand Slam title, is peaking at the right time, with the 67-minute mauling coming after she smashed past Ekaterina Makarova in less than an hour on Sunday.
"After I saved match point (against Safarova) I have got better, I got a lot of confidence from that and I believed in myself," said the 2011 French Open champion.
"I feel good, I always play well here and I hope I can take one more step this year."
Li, 31, will be hot favourite to reach Saturday's final although she faces a new challenge from 19-year-old Bouchard, who announced herself on the world stage by stunning Ana Ivanovic.
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