A packaged semiconductor device includes a molded interconnect substrate having a signal layer including a first channel and a second channel on a dielectric layer with vias, and a bottom metal layer for providing a ground return path. The signal layer includes contact pads, traces of the first and second channel include narrowed trace regions, and the bottom metal layer includes a patterned layer including ground cut regions. DC blocking capacitors are in series within the traces of the first and second channel for providing AC coupling that have one plate over one of the ground cuts. An integrated circuit (IC) includes a first and a second differential input channel coupled to receive an output from the DC blocking capacitors, with a bump array thereon flip chip mounted to the contact pads to provide first and second differential output signals.