What this appears to be is something called Cercospora blight, which is a fungus. These fungi attack a wide range of plants. The disease usually starts on the inner foliage and works outward. The affected foliage turns bronze to light brown color then grayish. Small, fuzzy or hairy spore-bearing structures, easily seen with a hand lens, form on the dead foliage. Eventually the dead foliage and twigs falls off the branch. With time all the inner foliage and twigs are gone, leaving only foliage at the very tips of the branches.  Since this is on the trunk, it is possible that this condition could eventually kill the tree.

However, your plant appears to be in the early stages; therefore applying a fungicide according to package directions, generally weekly during the growing season, may be helpful.

The availability of water is probably the most important factor in
successfully growing giant sequoia trees. They need abundant water but
don't do well in wet soils. Drought, the opposite of soaked soil, is
also extremely detrimental to giant sequoia growth. Allowing the soil to dry out between waterings may have weakened the plant and contributed to this condition.