A method of forming a stacked die structure is disclosed. A plurality of dies are respectively bonded to a plurality of semiconductor chips on a first surface of a wafer. An encapsulation structure is formed over the plurality of dies and the first surface of the wafer. The encapsulation structure covers a central portion of the first surface of the wafer and leaves an edge portion of the wafer exposed. A protective material is formed over the first surface of the edge portion of the wafer.