A semiconductor device has a flipchip semiconductor die mounted to a first substrate using a plurality of first bumps. An opening or plurality of openings is formed in the first substrate in a location central to placement of the flipchip semiconductor die to the first substrate. A plurality of semiconductor die is mounted to a second substrate. The semiconductor die are electrically connected with bond wires. An encapsulant is over the plurality of semiconductor die and second substrate. The second substrate is mounted to the first substrate with a plurality of second bumps. An underfill material is dispensed through the opening in the first substrate between the flipchip semiconductor die and first substrate. The dispensing of the underfill material is discontinued as the underfill material approaches or reaches a perimeter of the flipchip semiconductor die to reduce bleeding of the underfill material. The underfill material is cured.