Semiconductor device and method of forming graphene-coated core embedded withih TIM

A semiconductor device has a substrate and electrical component disposed over the substrate. The electrical component can be a semiconductor die, semiconductor package, surface mount device, RF component, discrete electrical device, or IPD. A TIM is deposited over the electrical component. The TIM has a core, such as Cu, covered by graphene. A heat sink is disposed over the TIM, electrical component, and substrate. The TIM is printed on the electrical component. The graphene is interconnected within the TIM to form a thermal path from a first surface of the TIM to a second surface of the TIM opposite the first surface of the TIM. The TIM has thermoset material or soldering type matrix and the core covered by graphene is embedded within the thermoset material or soldering type matrix. A metal layer can be formed between the TIM and electrical component.