A semiconductor device has a photonic semiconductor die and a lens mounted onto the photonic semiconductor die. The photonic semiconductor die and lens are singulated prior to mounting the lens onto the photonic semiconductor die. An adhesive bead is formed on the photonic semiconductor die to seal a cavity between the lens and photonic semiconductor die. The photonic semiconductor die and lens are disposed into a storage media for transporting the photonic semiconductor die to a semiconductor packaging facility. The photonic semiconductor and lens are disposed on a substrate after mounting the lens onto the photonic semiconductor die. An encapsulant is deposited over the substrate, lens, and photonic semiconductor die.