Q: I have a large tree that is very sick. A part of the trunk at bottom is infested with some sort of insect.
A: Woooo….this isn’t a happy tree!
My bet is that the damage was done several years ago, maybe when the house was built. The bark may have been damaged by heavy machinery or a big root might have been removed by a trencher.
In any case, the damage never reversed. The tree tried to heal over the rot but was never able to do so. Now naturally-occurring ambrosia beetles have made a home in the open trunk.
You need a consulting arborist to take a look. Don’t be surprised if they recommend removal.