A semiconductor device is made by mounting a plurality of semiconductor die to a substrate, depositing an encapsulant over the substrate and semiconductor die, forming a shielding layer over the semiconductor die, creating a channel in a peripheral region around the semiconductor die through the shielding layer, encapsulant and substrate at least to a ground plane within the substrate, depositing a conductive material in the channel, and removing a portion of the conductive material in the channel to create conductive vias in the channel which provide electrical connection between the shielding layer and ground plane. An interconnect structure is formed on the substrate and are electrically connected to the ground plane. Solder bumps are formed on a backside of the substrate opposite the semiconductor die. The shielding layer is connected to a ground point through the conductive via, ground plane, interconnect structure, and solder bumps of the substrate.