A semiconductor device has a semiconductor die mounted to a substrate. A plurality of conductive pillars is formed over a semiconductor die. A plurality of conductive protrusions is formed over the conductive pillars. Bumps are formed over the conductive protrusions and conductive pillars. Alternatively, the conductive protrusions are formed over the substrate. A conductive layer is formed over the substrate. The semiconductor die is mounted to the substrate by reflowing the bumps at a temperature that is less than a melting point of the conductive pillars and conductive protrusions to metallurgically and electrically connect the bumps to the conductive layer while maintaining a fixed offset between the semiconductor die and substrate. The fixed offset between the semiconductor die and substrate is determined by a height of the conductive pillars and a height of the conductive protrusions. A mold underfill material is deposited between the semiconductor die and substrate.