had a caterpillar problem this season- yes the area will die and dry up- if you can get some BT bacillus something ,it will kill pest- i found that the caterpillars get so deep into bud that hand picking is the best way- look for their droppings this will lead you to the culprit before there is a lot of damage- after my caterpillar invasion it started raining for days and bud rot set into the areas that had been damaged by their chewing-if you are expecting any rain I would pre-treat with serinade to stop rot before it begins- best of luck