Sandgren came to prominence at the Australian Open last year, when as world No 97, he progressed to the last eight, becoming the lowest ranked quarter finalist in 22 years.
During that remarkable run in Melbourne he beat world No five Dominic Thiem and three-time major champion Stan Wawrinka, before falling to Korean Hyeon Chung.
In sweltering conditions in Auckland, Sandgren struggled on serve for his first game, but was dominant from there.
Kohlschreiber couldn't find his range, and was constantly under pressure from Sandgren's power, accuracy, and ability to retrieve from anywhere.
Sandgren couldn't miss either, as he commented after the game "I just closed my eyes and swung".
The world No 34 Kohlschreiber was appearing in his fifth Auckland semi-final but it was a miserable afternoon for him.
He sprayed a forehand wide to concede the first set, then was broken early in the second set when he dumped a simple volley into the net, after a wondrous Sandgren lob had brought up break point.
The German never stopped trying, but was up against it; at 1-4 down in the second set, the American was yet to make an unforced error.
Kohlschreiber saved two match points at 5-2 down, but conceded the third with a double fault, which epitomized his day.