A package structure includes a semiconductor device, a circuit substrate and a heat dissipating lid. The semiconductor device includes a semiconductor die. The circuit substrate is bonded to and electrically coupled to the semiconductor device. The heat dissipating lid is bonded to the circuit substrate and thermally coupled to the semiconductor device, where the semiconductor device is located in a space confined by the heat dissipating lid and the circuit substrate. The heat dissipating lid includes a cover portion and a flange portion bonded to a periphery of the cover portion. The cover portion has a first surface and a second surface opposite to the first surface, where the cover portion includes a recess therein, the recess has an opening at the second surface, and a thickness of the recess is less than a thickness of the cover portion, where the recess is part of the space.