"I found more and more enjoyable moments in competition and I'm growing fast at the moment," said Xiao.
"I managed to stay calm during the whole match. I think it's important to give all my attention to the match. I can achieve anything if I do so.
"I'm confident now and I'm going to lift the trophy tomorrow, whoever I'm going to play. This is what I've been desperate to do for years. It's not done if I lose. I have one more match to play, which will be my biggest stage in my career."
Xiao racked up breaks of 64 and 96 as he quickly took a 3-1 lead over Holt before the Brit stormed back with breaks of 113 and 64 to level at three frame a piece.
Xiao snuck out in front once more with a break of 111 before Holt was only able to secure one of the two snookers he needed in the eighth frame. Xiao then finished the match with a break of 127.
"I can't say I threw it away,” Holt said.
“I felt good but I didn't really have chances to get on top. I felt as if I was more comfortable and he was more nervous. But I couldn't get in front, and towards the end he potted some great balls.
"I've got to take the positives out of this week but I'm disappointed because I thought I could have won it. I have proved that I can play out there."
In the days second semi-final Ding Junhui came through against Barry Hawkins by six frames to two.
In fairness it was a relatively straight forward victory for the world number 12 with Hawkins unable to match Ding's impressive form.