Hetzner's hardware is custom built by the manufacturers, for example motherboards by asrock, they even get their own mainboard microcode from asrock. SSDs come from Micron, they have their own chassis etc.
They have a _huge_ testing lab with insane amounts of testing equipment. I never had any problems with their hardware at all. Networking was not that good years ago but is stellar now.
Some is custom built, some (in their server auction) are just bare consumer-grade ATX motherboards in compact shelves.
We ran two dedicated servers at Hetzner for about three years and had two disk failures. These, too, were consumer-grade Seagate disks, and both of them had been in use by prior customers. All in all it was not a bother and we definitely got our money's worth.
They have a _huge_ testing lab with insane amounts of testing equipment. I never had any problems with their hardware at all. Networking was not that good years ago but is stellar now.