A semiconductor device has a substrate with a plurality of conductive vias and conductive layer formed over the substrate. A semiconductor die is mounted over a carrier. The substrate is mounted to the semiconductor die opposite the carrier. An encapsulant is deposited between the substrate and carrier around the semiconductor die. A plurality of conductive TMVs is formed through the substrate and encapsulant. The conductive TMVs protrude from the encapsulant to aid with alignment of the interconnect structure. The conductive TMVs are electrically connected to the conductive layer and conductive vias. The carrier is removed and an interconnect structure is formed over a surface of the encapsulant and semiconductor die opposite the substrate. The interconnect structure is electrically connected to the conductive TMVs. A plurality of semiconductor devices can be stacked and electrically connected through the substrate, conductive TMVs, and interconnect structure.