Semiconductor device and method of forming an integrated sip module with embedded inductor or package

A semiconductor device has a substrate with a first opening and second opening formed in the substrate. A first semiconductor component is disposed on the substrate. The substrate is disposed on a carrier. A second semiconductor component is disposed on the carrier in the first opening of the substrate. A third semiconductor component is disposed in the second opening. The third semiconductor component is a semiconductor package in some embodiments. A first shielding layer may be formed over the semiconductor package. An encapsulant is deposited over the substrate, first semiconductor component, and second semiconductor component. A shielding layer may be formed over the encapsulant.