The two amateurs ended Scotland's hopes of a first all Scottish final since 1909. Dunbar defeated Baberton's Paul Ferrier, while Schwab ended the hopes of local Jack McDonald.
Dunbar is looking to become the first Northern Irish player to win since Michael Hoey at Prestwick in 2001 and Schwab can become the first Austrian to lift the Amateur Championship trophy.
Dunbar raced to a two-hole lead over Ferrier after playing Royal Troon's front nine in 33, 3-under-par. However, consecutive double bogey sixes at 10 and 11 brought the match back to all square. Dunbar turned the contest around by winning the 12th with a birdie and 13th with a par.
The 23-year-old hails from Portrush, and attended the Darren Clarke Foundation. Dunbar spent 12 months on the programme last year, and had the chance to play with Clarke at Royal Portrush in January. "He's around a lot now that he lives back in Portrush so I see him a bit, and it was great to play with him."
Dunbar helped Great Britain & Ireland win last year's Walker Cup at Royal Aberdeen. He won two out of three matches to help defeat the United States 14-12.
Patience has been the key to reaching the final. "I'm quite a calm guy. I've got a lot of patience," he said.
Ferrier has just graduated from UNC Charlotte with a degree in psychology. He will rue the bogey he made at 15 to lose the hole after winning the 14th to get back to one down. Ferrier left Royal Troon with his head held high, despite not making the final.
"I've enjoyed every minute," Ferrier said. "I let it slip at 15 against Alan. Two down with three to play is always leaving you with a lot of work to do. I can take a lot from this heading into Regional Qualifying for The Open Championship at Goswick on Monday."
He faced a tight match against McDonald. The 19-year-old Scot from nearby Kilmarnock (Barassie) had much of the support.
McDonald was two down after 11 holes but fought back to square the match at the 15th. However, Schwab made a birdie on the par-5, 16th to go one up. The match ended when McDonald drove into the fairway bunker at the 18th and failed to make par.
"It was tight match," said McDonald an R&A Scholar at Stirling University studying applied mathematics. "I'm proud of the way I stayed composed this week, especially in the match play stages. I never got ahead of myself all week. It's been a big step up for me."
Schwab has also made a big step up this week. He has legendary German coach Willie Hoffman to thank. Hoffman coached Bernhard Langer to two Masters' titles, and made him one of world's best players.
"I drive to Munich once every two months to see him, and the rest of the time I send him videos," Schwab said.
Schwab comes from a sporting family. Father Andreas participated in the 1976 Winter Olympics at Innsbruck, and came fourth in the two-man Austrian Bobsleigh team. Matthias has a chance to get one over on Dad here at Royal Troon. Besides the Amateur Championship trophy, the winner gets a gold medal.
Hole by hole results of today's semi-finals can be viewed on RandA.org. The 36-hole final will commence at 8.30am.
Highlights will be shown on Sky Sports on Friday 22nd and Saturday 23rd June.