Why is it better?
Some of the issues I see are:
1. Software: The Servers including virtualization tools are all standardized around x86 (Intel, AMD). In fact, there is a lot more invested in software than in the HW.
2. Architecture: If the competition is based purely on architecture, the server team will look for highly dedicated (NVIDIA type), or the generalized architecture. A general purpose ARM CPU doesn't buy you anything special. Why not stick to AMD or Intel?
3. Silicon: TSMC may have an advantage in Silicon over Intel but Intel has been pumping out these processors for a long time and beating them on Silicon is an iffy strategy at best. If AMD is having a hard time competing then how can you expect a whole different architecture to win?
1. Watts: Clearly ARM has an advantage when it comes to lower watt CPU but at the higher end, I don't see it being a deal breaker unless the difference is huge. Nothing seems to indicate otherwise.
2. Bottom up: Remember how DEC stole the market from IBM, Sun from DEC, and then Intel from SUN? My believe is that when the majority of the CPU's are ARM systems, which they already are, that they will slowly move into the mainframe.
However, this will take time.
3. Customization: ARM Cpu's can be customized at a faster rate than intel CPU's. ARM CPU's with full blown AI engines, DSP's etc. are very common.
4. Multiple vendors for CPU choices: Unlike Intel or AMD, ARM allows anyone to find a vendor with close enough specs to what they need. If there isn't one then you can have a vendor design and spin one for you. You want one with 3 DSP cores, 2 Neural network cores, etc. and can't find one? Ask a vendor to make you one.
Apple did something like this in-house for their iPhone since Intel can't put everything they want in the CPU at the rate they want it. (plus the power consumption controls ...)
Ultimately ARM will win because of the speed of customization is in months and it will keep on eating into the x86 market. It will, however, take time.