A semiconductor device includes a semiconductor die. An encapsulant is deposited over the semiconductor die. An insulating layer is formed over the encapsulant and a first surface of the semiconductor die. A semiconductor component is disposed over the insulating layer and first surface of the semiconductor die. A first interconnect structure is formed over the encapsulant and first surface of the semiconductor die to embed the semiconductor component. A conductive via is formed in the semiconductor die. A heat sink is formed over the semiconductor die. A second interconnect structure is formed over a second surface of the semiconductor die opposite the first surface. A conductive layer is formed over the semiconductor component. An opening is formed in the insulating layer.