A semiconductor device has an integrated passive device (IPD) formed over a substrate. The IPD can be a metal-insulator-metal capacitor or an inductor formed as a coiled conductive layer. A signal interconnect structure is formed over the first side or backside of the substrate. The signal interconnect structure is electrically connected to the IPD. A thin film ZnO layer is formed over the substrate as a part of an electrostatic discharge (ESD) protection structure. The thin film ZnO layer has a non-linear resistance as a function of a voltage applied to the layer. A conductive layer is formed over the substrate. The thin film ZnO layer is electrically connected between the signal interconnect structure and conductive layer to provide an ESD path to protect the IPD from an ESD transient. A ground interconnect structure is formed over the substrate and electrically connects the conductive layer to a ground point.