The passage in full:
Isaiah 30:27-33 (KJV): 27-28 Behold, the name of the LORD cometh from far, burning with his anger, and the burden thereof is heavy: his lips are full of indignation, and his tongue as a devouring fire: And his breath, as an overflowing stream, shall reach to the midst of the neck, to sift the nations with the sieve of vanity: and there shall be a bridle in the jaws of the people, causing them to err.
29-32 Ye shall have a song, as in the night when a holy solemnity is kept; and gladness of heart, as when one goeth with a pipe to come into the mountain of the LORD, to the mighty One of Israel. And the LORD shall cause his glorious voice to be heard, and shall shew the lighting down of his arm, with the indignation of his anger, and with the flame of a devouring fire, with scattering, and tempest, and hailstones. For through the voice of the LORD shall the Assyrian be beaten down, which smote with a rod. And in every place where the grounded staff shall pass, which the LORD shall lay upon him, it shall be with tabrets and harps: and in battles of shaking will he fight with it.
33 For Tophet is ordained of old; yea, for the king it is prepared; he hath made it deep and large: the pile thereof is fire and much wood; the breath of the LORD, like a stream of brimstone, doth kindle it.
The Assyrians are attacking, and this passage is of 'a holy solemnity' (verse 29), clearly a ritual that will ensure victory for Judah. This would be a sacrificial ritual that would cause God to come to the aid of Judah and beat down the Assyrians. We know from numerous passages in the Old Testament (eg 2 Kings 17:17) that the Israelites and Judahites made their children 'pass through fire' as the ultimate sacrifice in times of great need. So, yes, this passage is about child sacrifice.
When (animal) sacrifices were performed, God was somehow in the fire consuming the offering. So we can visualise his tongue as the devouring fire (verse 27). The ancient Jews would have understood this as an allusion to child sacrifice, and God's fire "shall reach to the neck (verse 28)."
The ESV translation ("a burning place") is an equivocation. Tophet (verse 33) was the place outside Jerusalem in which child sacrifices were traditionally performed. We can see in Isaiah 30:33 that has been prepared for the king, with fire and much wood. The breath of God has kindled it. At times of national crisis, it was the duty of the king to sacrifice his eldest son by fire, so this reference to "for the king" is correct - once all is ready "for the king," he will bring his son for the sacrifice. In this case, the Assyrians, knowing that the sacrifice had been performed, would fear the might of the God, Yahweh, and he will defeat them.
In the Tophet citation, Wikipedia refers to Molech as a god, although nothing has come to light from the inscriptions and writings of other Near Eastern peoples to suggest there ever was a god by that name. 1 Kings 11:7 mentions Molech of Moab, but Moab's national god was Milcom and Molech is not known in inscriptions from Moab. Of course, Molech could be a god worshipped nowhere outside Israel and Judah, but another explanation is more likely. Leviticus 20:3, a likely post-Exilic polemic, talks of giving children to Molech as defiling Yahweh's sanctuary, so it appears that ‘Molech’ was not a god but rather a sacrificial term for the practice of offering children as sacrifices by fire.
As an aside, this passage (Isaiah 30:27-33) reads like a hymn to be sung by the Jews in preparation for the coming sacred event. My guess is that it was adapted from a traditional, generic version sung on all such occasions.
Although the references to child sacrifice are clear, the above is not the only analysis possible. Smith does not give his own view, simply regarding it as an obvious reference, but does mention the analysis of P. Mosca in 'Child Sacrifice'. Mosca believes the references to child sacrifice are intended symbolically, to describe Yahweh's coming destruction of Israel. In this view, Israel is the child victim.
Apart from the fact that I (humbly) consider my exegesis better, my objection to this is that in verse 19, Isaiah says he is addressing the people of Zion, who live in Jerusalem, and the sacrificial images in verses 27-33 are those of which Judahites would have been familiar. The destruction of Israel, which did occur during the preparation of this book, does not fit well with this passage. When Isaiah predicts the defeat of Assyria, he is certainly not describing Yahweh's coming destruction of Israel.