Unseeded Kashyap, who pulled off a major upset, beating third-seed Boonsak Ponsana of Thailand enroute to last-eight stage yesterday, found the world number 26 a tough nut to crack and lost the match in 41 minutes.
World number 38 Kashyap gave a stiff competition to the Chinese and at one point the duo were locked at nine-all, before Pengyu suddenly stormed ahead and pocketed the first game.
In the second game also, Kashyap put up a brave fight and saved as many as four match points.
However, riding on some long rallies and well-controlled net plays, Pengyu clinched the issue and set a semifinal-clash with second-seed Taufiq Hidayat of Indonesia.
Hidayat overcame fifth seed Tago Kenichi of Japan 21-19 21-19 in another quarterfinal encounter.
In the other final-four match, Yun Hu of Hong Kong will play local hope Jan O Jorgensen.
The two other Indians in the singles -- Chetan Anand and Anand Pawar have already crashed out of the event.
