After rounds of 64-65, the Chilean stands at 13-under 129, five strokes ahead of England's Lee Westwood and six better than Spain's Sergio Garcia.
Westwood and Garcia both matched Niemann's 65 at Trump National Golf Club.
Northern Ireland's Tom McKibbin (66) and Harold Varner III (67) are tied for fourth at six under par.
Australian Herbert and Englishman Poulter both started the day two shots behind Niemann, but fell off the pace with rounds of even-par 71 and one-over 72, respectively.
At five under through 36 holes, Herbert is tied with three others, while Poulter is tied for 10th at four under.
The in-form Herbert, who came into the tournament having not made a bogey in LIV Golf in 62 holes, made four birdies on Friday.
But also on his card were two bogeys and a double on the par-four 11th.
Niemann, who is looking for his ninth LIV Golf individual title, was still not satisfied with where he is.
"I mean, to be honest, that's the kind of discussion that I always have with my coach," Niemann said.
"He would come out to me and say, 'Hey, you were No.1 in strokes gained off the tee or approach to the green or whatever stat.' But I don't feel like - I feel like I'm hitting it a lot better. I feel like it can be a lot better, too, right now."
The 27-year-old has yet to make a bogey through 36 holes. For the second consecutive day, he birdied five of the nine holes on the front side. Niemann went on to par Nos.10-17 and closed with a birdie four at the par-5 18th hole.
After hitting 15 of 18 greens in regulation Thursday, he found the surface 16 of 18 times on Friday.
Westwood caught fire on the sixth hole, birdieing three in a row and four of five. Like Niemann, he converted for birdie on No.18.
Garcia, who was even par through 14 holes on Thursday, made seven birdies on Friday, but avoided the trouble he found in the opening round when he suffered through two bogeys and a double-bogey.
Niemann also has the team he captains, Torque GC, comfortably on top of the team leaderboard. Torque is nine under for the week, five shots clear of HyFlyers GC.
Marc Leishman (69) is at two under while Travis Smyth (71) is at even par.
Fellow Australian Cameron Smith (72) is at five over.
with AAP
