A semiconductor device has an interposer and a surface mount technology (SMT) component disposed on the interposer. The interposer is disposed on an active surface of a semiconductor die. The semiconductor die is disposed on a substrate. A first wire bond connection is formed between the interposer and semiconductor die. A second wire bond connection is formed between the interposer and substrate. A third wire bond connection is formed between the substrate and semiconductor die. An encapsulant is deposited over the substrate, semiconductor die, interposer, and SMT component. In one embodiment, the substrate is a quad flat non-leaded substrate. In another embodiment, the substrate is a land-grid array substrate, ball-grid array substrate, or leadframe.