An improved method for forming a semiconductor package is disclosed herein. The method includes forming a multi-layer package substrate having a first major surface and a second major surface opposite to the first major surface. The package substrate comprises a recess region. A semiconductor die is attached to the die region within the recess region. A dam structure is formed within the recess region. The dam structure surrounds the semiconductor die and extends upward to a height below the first major surface of the package substrate. A liquid encapsulant material is dispensed into the recess region. The liquid encapsulant material is surrounded by the dam structure. The liquid encapsulant extends upwardly to a height below the height of the dam structure. A package lid is attached to the package substrate.