A semiconductor device has a first component. A modular interconnect structure is disposed adjacent to the first component. A first interconnect structure is formed over the first component and modular interconnect structure. A shielding layer is formed over the first component, modular interconnect structure, and first interconnect structure. The shielding layer provides protection for the enclosed semiconductor devices against EMI, RFI, or other inter-device interference, whether generated internally or from external semiconductor devices. The shielding layer is electrically connected to an external low-impedance ground point. A second component is disposed adjacent to the first component. The second component includes a passive device. An LC circuit includes the first component and second component. A semiconductor die is disposed adjacent to the first component. A conductive adhesive is disposed over the modular interconnect structure. The modular interconnect structure includes a height less than a height of the first component.