A method of forming a semiconductor device is provided. The method includes forming a first cavity at a first major surface of a first encapsulant. A first semiconductor die is affixed on the first major surface of the first encapsulant and a second semiconductor die is affixed on a bottom surface of the first cavity. A second encapsulant encapsulates the first semiconductor die, the second semiconductor die, and at least exposed portions of the first major surface of the first encapsulant. A package substrate is formed on a first major surface of the second encapsulant. The package substrate includes conductive traces interconnected to the first semiconductor die and the second semiconductor die.