Another way to compare prices for intel vs. arm: Intel's tablet hardware cost $75 for z670 cpu + $20 for chipset. this compare to $20 tegra 2. There doesn't seem much of an incentive for intel to sell $20 systems on a chip.

And regarding the critical code sections becoming silicon: i don't think it's becoming silicon , because of the huge volumes that are require to manufacture silicon. but they might become FPGA code.

FPGA is basically a programmable hardware. it has been used in the past as computer co-processor , in fields like biology, oil and gas and database accelerators. but the main barrier is that programming them is complex and it's hard to find FPGA programmers.

But i see improvements in these areas. convey computer claims that it has made programming an FPGA as easy is c programming. it woud be interesting to have convey computer offer via the cloud.

But let's return to the intel vs ARM servers: according to arstechnica , arm would find it very difficult to offer high per-thread performance at low power. but given a cheap enough arm server processor , and the help of GPU's(and FPGA or other coprocessors) intel could be seriously threatened.