Abstract: A semiconductor die has first and second discrete semiconductor components mounted over a plurality of wettable contact pads formed on a carrier. Conductive pillars are formed over the wettable contact pads. A semiconductor die is mounted to the conductive pillars over the first discrete components. The conductive pillars provide vertical stand-off of the semiconductor die as headroom for the first discrete components. The second discrete components are disposed outside a footprint of the semiconductor die. Conductive TSV can be formed through the semiconductor die. An encapsulant is deposited over the semiconductor die and first and second discrete components. The wettable contact pads reduce die and discrete component shifting during encapsulation. A portion of a back surface of the semiconductor die is removed to reduce package thickness. An interconnect structure is formed over the encapsulant and semiconductor die. Third discrete semiconductor components can be mounted over the semiconductor die.