CaptainExplosion said:
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My friend linked me to their development blog, and they showed their workflow.
From memory: I think they use Blender to do the modeling and Cycles (Blender's path tracer) to render the models as sprites.
http://steamcommunity.com/games/427520/announcements/detail/1460718682944077082
https://www.factorio.com/blog/post/fff-146