A semiconductor device has a substrate with an inductor formed on its surface. First and second contact pads are formed on the substrate. A passivation layer is formed over the substrate and first and second contact pads. An insulating layer is formed over the passivation layer. The insulating layer is removed over the first contact pad, but not from the second contact pad. A metal layer is formed over the first contact pad. The metal layer is coiled on the surface of the substrate to produce inductive properties. The formation of the metal layer involves use of a wet etchant. The second contact pad is protected from the wet etchant by the insulating layer. The insulating layer is removed from the second contact pad after forming the metal layer over the first contact pad. An external connection is formed on the second contact pad.