An integrated circuit package system includes: providing a substrate; mounting a first package above the substrate, the first package having a mold cavity exposing an exposed portion on a first integrated circuit from a first package encapsulation; mounting a second package above the first package and attached to the exposed portion of the first integrated circuit; mounting a structure above the second package and connected to the substrate around the first package; and encapsulating the first package and the second package with an outer encapsulation having a completely planar top or a planar top co-planar to a top surface of the structure.