A die stack structure is provided. The die stack structure includes a non-extended semiconductor die, an extended semiconductor die, and an extended top semiconductor die are stacked vertically over a base semiconductor die. The extended semiconductor die and the extended top semiconductor die each have an extension portion extending horizontally outward from one side thereof as compared to the non-extended semiconductor die. An encapsulant layer is formed over the base semiconductor die and encapsulates the sidewalls of the non-extended semiconductor die, the extended semiconductor die, and the extended top semiconductor die. Thermally conductive features are formed in the extension portion of the extended semiconductor die and in the extension portion of extended top semiconductor die. A thermally conductive structure is embedded in the encapsulant layer, extending vertically between the extended semiconductor die and the extended top semiconductor die, and contacting the thermally conductive features.