This hack targets the firmware on modern power supplies. (Yes, power supplies are also computers.)
Normally, when a phone is connected to a power brick with support for fast charging, the phone and the power adapter communicate with each other to determine the proper amount of electricity that can be sent to the phone without damaging the device — the more juice the power adapter can send, the faster it can charge the phone.
However, by hacking the fast charging firmware built into a power adapter, Xuanwu Labs demonstrated that bad actors could potentially manipulate the power brick into sending more electricity than a phone can handle, thereby overheating the phone, melting internal components, or as Xuanwu Labs discovered, setting the device on fire.
Research paper, in Chinese.