Unlike counterfeit electronics of the past, modern clones are very sophisticated.
The counterfeiters make their own components, boards, and systems from scratch and then package them into superficially similar products. The clones may be less reliable than the genuine product, having never undergone rigorous testing. But they may also host unwanted or even malicious software, firmware, or hardware—and the buyer may not know the difference.
Cloning spans all levels of electronics.
Nobody really knows the true scale of electronics cloning.
So who exactly are the cloners? They could be just a couple of guys in a garage or a big state-funded organization, or something in between. State-sponsored cloning is thought to be common.
To fabricate the fake, the cloner typically turns to an independent manufacturing facility, which may be similar to or even the same as that used to make the genuine product.