A semiconductor device is fabricated by providing a carrier for supporting the semiconductor device. A first semiconductor die is mounted to the carrier. The first semiconductor die has a contact pad. A first dummy die is mounted to the carrier. The first dummy die has a through-silicon via (TSV). The first semiconductor die and the first dummy die are encapsulated using a wafer molding material. A first interconnect structure is formed over the first semiconductor die and the first dummy die. The first interconnect structure is connected to the contact pad of the first semiconductor die and the TSV of the first dummy die. The carrier is removed and a second interconnect structure is formed over the first semiconductor die and the first dummy die. The second interconnect structure is connected to the TSV of the first dummy die. A semiconductor package is connected to the second interconnect structure.