With IC chip they claim. Roughly $8 from eBay. So much for Apple’s plan to clamp down on aftermarket accessories. That being said, there’s no guarantee these (I assume) cloned chips won’t be blocked by some future firmware update, at least you’ll still be able to charge with these cables (theoretically) even if you can’t sync with them. I’m very curious to know what Apple actually charges for a license to make these cables (and docks) to reputable companies like Belkin and so on. Presumably the pricing is more or less fixed so that aftermarket cables should cost similar to Apple’s genuine ones.
Maybe the real killer app will be USB3.0 when Apple adds that to the Lightning spec for the iPhone 5S. I imagine the Chinese will have difficulty mass producing those in the immediate future – judging by the distinct lack of ordinary USB3.0 cables at rock-bottom bulk lot prices.