They need to go lower power/heat than that and i just dont think they are going to develop a new small core.
Standard core option <-- Been here since Zen1
Dense core option <-- Been here since Zen4
Low Power core option <-- Will be added with Zen5
The reason to avoid ARM is the new product clause:
Post-Mendocino w/ AMD64 => $100+ soc -> No fees for AMD64
Post-Mendocino w/ ARM64 => $100+ soc -> $600+ product times 3% ARM64 royalty tax -> $18+ per product times 10 million = $180+ million in royalties
AMD64 can be used for lower costing solutions, while ARM64 can't be used. However, the low-cost solution brought on by Cat cores require cheap nodes. So, a Zen5E/LP core on 4nm will not be as cheap as a synthesized AMD64 core on 12FDX.
Lowest average cost range:
A9-9400 = $80-$120 average / 8GB+128GB
3015e/Ce = $120-200 average / 4GB+64GB
Silver 7120u = $200-300 average / 4GB+128GB
3 7320U = $300-400 average / 8GB+256/512GB
Stoney/Pollock is still more ideal than Mendocino dual-core and quad-core in the cost department.
Competition around that area will be mainly 4x/x6, A78, x4 A710/A715 or x2/x4 ADL-N(or the successor)... Anything bigger will be just too expensive and well into mainstream ryzen territory.
Should be noted that RISC-V is basically going to nuke this.
RISC-V $150 gives 16-cores of A78 on 12nm :: TDP 30W down to 5W
ARM $120 gives 4-cores of A78 on 6nm and 4xA76 on 16nm :: TDP 8W/12W
Intel $120 gives 4-cores of Zen+ on Intel 7 :: TDP 6W
The closest option from AMD is cheapo 4300U/5300U at $180/$190 respectively. Since, Mendocino products aren't cheap or affordable. Quad-core Mendocino happens to be near double the cost of Quad-core Renoir/Cezanne. I doubt SV will be affordable at all, since AMD's track record at TSMC has been awful. The salvaged big die is cheaper than the base small die.
Expense of supply chain:
South Korea = Highest
Taiwan = 2nd place (AMD has never gotten affordability with TSMC :: Crowned Eagle/Bhavani was purely fabbed at Dresden for example)
America = 3rd place (Pollock/Raven2 never got as cheap as Germany/Singapore sourced products)
Germany = 4th place (Stoney was real cheap)
Singapore = 5th place (Sempron 90nm/65nm was really cheap)