Integrated circuit packaging system with pad and method of manufacture thereof

A method of manufacture of an integrated circuit packaging system comprising:

• forming a peripheral lead having a peripheral lead bottom side, a peripheral lead top side, a peripheral lead conductive plate at the peripheral lead bottom side, and a peripheral lead non-horizontal side with a peripheral lead horizontal ridge protruding from the peripheral lead non-horizontal side;
• forming a first top distribution layer on the peripheral lead top side;
• connecting an integrated circuit to the first top distribution layer;
• forming an encapsulation over the integrated circuit and the first top distribution layer;
• and
• applying an insulation layer directly on a distribution layer bottom extent of the first top distribution layer and a peripheral lead ridge lower side of the peripheral lead horizontal ridge with a cavity in the portion of the insulation layer directly below the integrated circuit.

An integrated circuit packaging system comprising:

• a peripheral lead having a peripheral lead bottom side, a peripheral lead top side, a peripheral lead non-horizontal side, and a peripheral lead horizontal ridge protruding from the peripheral lead non-horizontal side;
• a first top distribution layer on the peripheral lead top side;
• an integrated circuit connected to the first top distribution layer;
• and
• an insulation layer directly on a distribution layer bottom extent of the first top distribution layer and a peripheral lead ridge lower side of the peripheral lead horizontal ridge with a cavity in the portion of the insulation layer directly below the integrated circuit.