Oh Gosh it's Ganache!
So how do they do it? The trick is use ganache! Ganache is a chocolate 'icing' with a peanut butter texture that firms when cooled and softens when slightly warm. Ganache is smoothed on over a cake it dries hard and very smooth (but make sure to use a bench scrapper!:)). I like to use the following recipe from Paris Cutler's book Plant Cake - a great resource and an amazingly successful Australian cake business. Here is her recipe!
2 lb 10 oz bittersweet chocolate chips (I like to use Ghirardelli bittersweet chips with 60% cocoa - the high cocoa is important here I don't recall why again but it is!:))
2 1/2 cups plus 1 tbsp of whipping cream (her recipe says not to use heavy cream but I can only find heavy so that's what I use and it works just fine:))
1. Put chocolate and cream in a microwave-proof bowl and heat for a few minutes on high. Remove and stir. Repeat heating until cream is fully incorporated and ganache is smooth.
2. Let sit at room temperature overnight OR to speed up the process refrigerate uncovered for about one hour to firm.
Apply the ganache with a spatula and smooth sides and top of the cake with a bench scrapper. If the ganache is too firm to apply heat just a bit in the microwave. If your ganache has firmed on your cake and you want to re-smooth it heat water in a pot and use it to dip the bench scrapper to heat it (and make sure to dry it with a towel!). Then re-smooth away!
Once your cake is covered with ganache firm by setting it overnight or firm it in the fridge for about an hour.
Next apply a thin film of shortening at the bottom edges or water to adhere the fondant to the ganache surface. Once ready, roll out your fondant to 1/8" thickness and cover your cake.
Happy Cake Making!