Is that an added on piece on the bottom of the joist? The damage may not be damage at all but sap wood. the browm is dried out sap. The white spots could be spider egg sacks. Are they fuzzy? If they are fuzzy they are most likely spider egg sacks. If it sap wood as I suspect then its nothing to worry about.

That looks like sap to me. Nothing to worry about if it is.

Matt

Doesn't look like damage to me. Looks like normal edge of tree bark or sap pocket.

Thanks for the replies. First of all, there is no addition to the joist. The 'damaged' part is the lower end of the wood. Yes, the 'white' stuffs are fuzzy. I guess they might be spider eggs. I sprayed 'insect killer' on the surface. Should I remove bad portion? If I did, do I need add something in to fill the space?

no, it is fine. it is nothing more than this board was cut from a section close to a split or a brnach and you get that. if you cut a board thru a knot you see the same thing, though it does not always fall off.

all it means is the builder used a lower grade of wood, but then again most of the grading is for looks not strength. if you cut that section out, you WILL lose strength.

Just leave it alone. nothing really to worry about. BTW there probably is a lot more spider nests in your attic that you haven't seen. plus they won't hurt anything. Always had plenty in my old house in the crawlspace.